Ethical Behavior on the Part of Plastics Products Company May

question 4

Multiple Choice

Ethical behavior on the part of Plastics Products Company may be inhibited by

• A)clear ethical standards.
• B)collective decision making.
• C)legislative determinations of what represents society's best interest.
• D)managers' dissent to unethical decisions.

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Definitions:

Operating Income

The profit earned from a company's core business operations, excluding deductions of interest and tax.

Variable Costing

The concept that considers the cost of products manufactured to be composed only of those manufacturing costs that increase or decrease as the volume of production rises or falls (direct materials, direct labor, and variable factory overhead).

Absorption Costing

An accounting method that includes all of the manufacturing costs in the cost of a product, including direct materials, direct labor, and both variable and fixed manufacturing overhead.

Margin of Safety

The difference between actual or projected sales and the break-even sales level, used to assess risk.