Under the "Ultramares" Doctrine, to Which of the Following Parties

question 28

Multiple Choice

Under the "Ultramares" doctrine, to which of the following parties will an accountant be liable for negligence?

• A)Parties in privity and foreseen parties.
• B)Parties in privity but not foreseen parties.
• C)Foreseen parties but not parties in privity.
• D)Neither foreseen parties nor parties in privity.

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Definitions:

Activity Cost Pool

A grouping of individual costs based on the activities that drive those costs, used in activity-based costing.

Direct Labor Rate

The cost per hour for labor directly involved in manufacturing a product or providing a service.

Direct Materials Cost

The cost of raw materials that are directly used in the manufacture of a product and are easily traceable to it.

Total Overhead Applied

The total amount of manufacturing overhead costs allocated to individual jobs or products based on a predetermined overhead rate.