Which One of the Following Statements Is TRUE

question 9

Multiple Choice

Which one of the following statements is TRUE?

• A) in an agency relationship, the principal delegates decision-making authority to the agent.
• B) in an agency relationship, the agent delegates authority to the principal.
• C) an example of an agency relationship is when the ceo nominates a slate of candidates to be on the board of directors.
• D) an example of an agency relationship is when a supervisor hires a forklift operator.
• E) the supervisor-employee relation between a production line supervisor and a production line operator is an example of an agency relationship.

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Definitions:

Plantwide Overhead Rate

A single overhead rate calculated by dividing total factory overhead by the total amount of the allocation base used across the entire plant.

Direct Labor

Labor costs associated with employees who are directly involved in the production of goods or the provision of services.

Predetermined Overhead Rate

A rate used to assign overhead costs to products or services, calculated by dividing estimated overhead by an allocation base such as labor hours.

Predetermined Overhead Rate

A pre-determined rate used to allocate manufacturing overhead expenses to products, based on a specified activity measure, and calculated prior to the start of a period.