What If Instead of Mark Directing Charlie Not to Buy

question 67

Multiple Choice

What if instead of Mark directing Charlie not to buy any CDs he said,"I don't think it is a good idea to buy CDs because we cannot sell the ones we have in stock." Charlie still purchased nine CDs from customers.Would Charlie be liable to Mark?

• A)No,because Mark's statement was merely advisory and not mandatory.
• B)No,because Mark cannot control every aspect of Charlie's work performance.
• C)No,because Mark did not put his requirement in writing.
• D)Yes,because Charlie should have known it was not in Mark's best interests to purchase more CDs when they have a massive overstock.
• E)Yes,because Charlie did not follow Mark's instructions.

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Definitions:

Average Cost

Average cost is the total cost of producing a certain quantity of goods divided by that quantity, calculating the cost per unit of goods produced.

Raw Materials Inventory

The total cost of all the raw materials that are currently held by a company and intended for production.

Standard Costs

Pre-determined or estimated costs of products, labor, and materials or overhead for a particular period under normal conditions.

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A unit of measure equal to one thousand grams, commonly used worldwide to measure weight.