Director Independence and Non-Interlocking Directorships Are Desirable Traits of Top-Ranked

question 60

Multiple Choice

Director independence and non-interlocking directorships are desirable traits of top-ranked boards.What does this mean?

• A) Directors can serve on the board of directors of other related companies.
• B) Directors are free of all ties to the CEO and the company.
• C) The CEO can serve as a director on the other director boards.
• D) Top managers cannot be on the board of directors.

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Definitions:

Activity Rates

Rates used in activity-based costing to allocate overhead costs to products or services based on their consumption of activities.

Activity Cost Pools

Accumulation of overhead costs intended to be allocated to various activities based on their cost drivers.

Plantwide Overhead Rate

A single overhead absorption rate used throughout a manufacturing plant, applied to all jobs or products regardless of the department in which they were produced.

Machine Hours

A measure of production time, quantifying the hours a machine is operated in the manufacturing process.