Cahalane Corporation Has Provided the Following Data for Its Two

question 194

Multiple Choice

Cahalane Corporation has provided the following data for its two most recent years of operation:

-Which of the following statements is true for Year 1?

• A) The amount of fixed manufacturing overhead deferred in inventories is $48,000
• B) The amount of fixed manufacturing overhead released from inventories is $560,000
• C) The amount of fixed manufacturing overhead deferred in inventories is $560,000
• D) The amount of fixed manufacturing overhead released from inventories is $48,000

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Definitions:

Negative Externalities

Adverse effects suffered by a third party or the public as a result of an economic transaction or activity.

Principal-Agent Problem

At a firm, a conflict of interest that occurs when agents (workers or managers) pursue their own objectives to the detriment of the principals’ (stockholders’) goals. In public choice theory, a conflict of interest that arises when elected officials (who are the agents of the people) pursue policies that are in their own interests rather than policies that would be in the better interests of the public (the principals).

Private Sector

The private sector encompasses businesses and entities that are not owned or operated by the government, operating primarily for profit.

Political Decision Making

The process by which public policies are formulated and decided upon by individuals and groups within governmental systems.