When a Corporation Is Set Up as a Mere Instrumentality

question 43

True/False

When a corporation is set up as a mere instrumentality of a parent corporation, it is sometimes referred to as a dummy corporation or a corporate shell.

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Definitions:

Factory Overhead

All indirect costs associated with manufacturing, excluding direct labor and direct materials costs.

Factory Overhead Costs

Indirect manufacturing expenses that are not directly tied to the production of goods, such as utilities, maintenance, and managerial salaries.

Direct Labor Hours

Direct Labor Hours are the total time workers who are directly involved in the manufacturing process spend on producing goods.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor costs.