Omar and Caitlin Own Competing Computer Software Companies

question 74

Multiple Choice

Omar and Caitlin own competing computer software companies.The success of Caitlin's business was due largely to the work of her chief designer, Mia.During a recent party, Omar asked Mia if she was happy working for Caitlin.Mia answered, "It's okay, I guess." Omar then spent the next hour explaining to Mia how she would earn a great deal more money, and how she would be involved in much more interesting projects, if she worked for him instead.Which of the following statements is most likely TRUE?

• A)To successfully sue Omar for interference with contractual relations, Caitlin must prove (among other things) that she had to pay Mia's replacement a higher salary than she had paid Mia.
• B)If Mia does leave her job with Caitlin and begins to work for Omar, Caitlin will certainly be entitled to receive damages from Omar.
• C)Omar cannot be held liable to Caitlin for the tort of interference with contractual relations if the court is satisfied that he provided Mia with information about his organization, but did not actually persuade her to leave her job and break her contract of employment with Caitlin.
• D)Omar cannot be held liable to Caitlin for the tort of interference with contractual relations unless he committed some other tort, such as intimidation, against Mia.
• E)Because he knew that Mia worked for Caitlin, he automatically will be liable for punitive damages if the court finds that a tort has been committed.

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Definitions:

Manufacturing Activities

The set of processes involved in the production of goods, ranging from raw materials handling to the final assembly of products.

Departmental Overhead Rate

A charge rate specific to each department of a company, calculated to allocate indirect costs to products more accurately.

Plantwide Overhead Rate

A single overhead rate calculated by dividing total factory overhead by total direct labor hours or machine hours, applied company-wide.

Overhead Allocations

The process of distributing indirect costs (overheads) across various cost objects, such as products or departments, based on predetermined criteria.