The Cases of Enron and Bernard Madoff Go Beyond a Question

question 41

Multiple Choice

The cases of Enron and Bernard Madoff go beyond a question of ethics because in both cases ________.

• A) laws were clearly broken
• B) many people were hurt
• C) billions of dollars were involved
• D) no harm was intended and they had good reasons for what they did

---

Definitions:

Predetermined Overhead Rate

A rate calculated at the beginning of the period by dividing estimated total overhead costs by an estimated allocation base, used to apply overhead costs to products or services.

Unused Capacity

The portion of a company's production potential that is not being utilized to manufacture goods or provide services.

Estimated Activity

An approximation of the amount of work or level of effort needed for a particular task or project.

Activity at Capacity

The level of operational activity that a company can achieve using its current resources without incurring additional costs.