Charles Owns a Business with Two Separate Departments

question 29

Multiple Choice

Charles owns a business with two separate departments. Department A produces $100,000 of income and Department B incurs a $60,000 loss. Charles participates for 550 hours in Department A and 100 hours in Department B. He has full-time employees in both departments.

• A) If Charles elects to treat both departments as a single activity, he cannot offset the $60,000 loss against the $100,000 income.
• B) Charles may not treat Department A and Department B as separate activities because they are parts of one business.
• C) If Charles elects to treat the two departments as separate activities, he can offset the $60,000 loss against the $100,000 income.
• D) If Charles elects to treat both departments as a single activity, he can offset the $60,000 loss against the $100,000 income.
• E) None of the above.

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Definitions:

Early Research

Refers to the initial studies and investigations conducted in a particular field or subject area.

LMX Theory

A theory that focuses on the dyadic relationship between leaders and followers, emphasizing the differential relationships leaders form with members of their group.

Interaction

The process of reciprocal action or engagement between two or more entities, resulting in an effect or exchange.

Leadership Theory

The study of leadership models and approaches to understand what makes an effective leader and how leadership is exercised.