Scienter Exists If

question 34

Multiple Choice

Scienter exists if

• A)Martin knows that the transmission on his truck is defective,but does not tell this fact to potential buyers.
• B)The racehorse that Karen is trying to sell has a genetic defect,but Karen does not know about the defect,and so she does not warn potential buyers.
• C)Jake,a real estate agent,tells a client that he has a house that "will make all her dreams come true."
• D)Jon forces Bill to sign a contract to sell Jon a car below market value.

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Definitions:

Materials Price Variance

The variance between the real expense of materials and their anticipated (standard) price.

Raw Material

The basic substances or components that are processed or used in the manufacturing of goods.

Direct Labor-Hours

The cumulative number of labor hours directly engaged in manufacturing goods or services.

Materials Price Variance

The difference between the actual cost of materials and the standard cost, multiplied by the quantity of materials purchased.