Advocates of the Stakeholder Concept

question 49

Multiple Choice

Advocates of the stakeholder concept:

• A) argue that an appreciation for stakeholders is fundamental to understanding how to make money.
• B) believe that responding to stakeholders is simply good business.
• C) feel it is necessary to not only recognize the interests of all stakeholders but also to promote the loyalty of other individuals and groups.
• D) believe that shareholders are a principal stakeholder.
• E) All of the above are true.

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Definitions:

Actual Direct Labor Cost

The total expense of labor directly involved in the manufacturing of a product, excluding indirect costs such as supervisory personnel.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (or standard) variable overhead based on the actual level of activity.

Variable Overhead

Costs that fluctuate with production output levels, such as utilities or indirect materials, but are not directly tied to specific units produced.

Variable Overhead Rate Variance

The difference between the actual variable overhead costs and the standard variable overhead costs allocated based on a predetermined rate.