Which of the Following Is True Regarding Awards of Punitive

question 45

Multiple Choice

Which of the following is true regarding awards of punitive damages in the U.S.?

• A)Awards of punitive damages in the U.S.are very similar to awards of punitive damages under the Canadian judicial system.
• B)The Supreme Court ruled that the issue of punitive damages is for the jury and will not be disturbed on appeal,regardless of the ratio of punitive damages to compensatory damages.
• C)A ratio of punitive damages to compensatory damages greater than 9 to 1 violates due process.
• D)It is not always easy to predict what a court will do regarding punitive damages in any given case.
• E)Punitive damages may not be awarded in excess of $3 million dollars.

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Definitions:

Unit Product Cost

The cost associated with producing a single unit of product, including direct materials, direct labor, and allocated overhead expenses.

Net Operating Income

A company's operating profit after subtracting all operating expenses but before interest and taxes, reflecting the profitability of the core business activities.

Absorption Costing

A technique in accounting where all costs incurred from manufacturing, like direct materials, direct labor, and both kinds of manufacturing overhead (variable and fixed), are factored into the product's pricing.

Unit Product Cost

The total cost incurred to produce, bundle, and ready one unit for sale, including both direct and allocated overhead costs.