Javier Is the Shareholder of a Cellphone Manufacturing Company

question 62

Multiple Choice

Javier is the shareholder of a cellphone manufacturing company. Which of the following statements about him is true?

• A)He does not have any claim to the residual earnings of the company.
• B)He is the only person entitled to receive the profits of the company.
• C)He is protected from being taken advantage of by the management team due to his oversight rights.
• D)He is not able to exchange money with the corporation without a clearly specified payment in return.

---

Definitions:

Factory Overhead Cost Budget

A financial plan outlining the expected indirect manufacturing costs, including utilities, maintenance, and depreciation.

Total Variable Cost

The sum of all costs that vary directly with the level of production or output, such as raw materials and direct labor.

Total Fixed Costs

Total fixed costs are the sum of all costs that remain constant regardless of the level of production or sales activities, such as rent, salaries, and insurance premiums.

Activity Base

A measure used to assign costs to activities that incur costs, often used in the context of activity-based costing.