Evergreen Corporation Manufactures Circuit Boards and Is in the Process

question 17

Multiple Choice

Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget.The pro forma income statement for the current year is presented below. $$\begin{array} { | l | l | l | } \hline \text { Sales } & & \$ 3,500,000 \\\hline \text { Cost of sales: } & & \\\hline \text { Direct Material } & \$ 500,000 & \\\hline \text { Direct labor } & 250,000 & \\\hline \text { Variable Overhead } & 275,000 & \\\hline \text { Fiked Overhead } & \underline { 600,000 } & 1,625,000 \\\hline \text { Gross Profit } & & \$ 1,876,000 \\\hline \text { Selling and General \& Admin. Exp. } & & \\\hline \text { Variable } & 750,000 & \\\hline \text { Fiked } & 250,000 & 1,000,000 \\\hline \text { Operating Income } & & \$ 875,000 \\\hline\end{array}$$ The contribution margin ratio for the current year is:

• A) 53.6%.
• B) 49.3%.
• C) 46.4%.
• D) 25%.

Grasp the concept of fiduciary duties owed by directors, officers, and agents to the corporation and its shareholders.

Recognize the legal mechanisms available to shareholders for addressing breaches of duty and protecting their interests within a corporation.

Understand the concept of a closely held corporation and the specific legal considerations and protections applicable to it.

Identify examples of breach of fiduciary duty and understand the consequences of such breaches.

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Definitions:

Reversible Figures

Visual illusions or images that can be perceived in more than one way, revealing cognitive processes involved in visual perception.

Figure and Ground

A principle in gestalt psychology that refers to the tendency of the perceptual system to simplify a scene into the main object that we focus on (figure) and everything else that forms the background (ground).

Gestalt Principle

A psychological theory suggesting that individuals perceive objects as whole systems rather than the sum of their parts.

Proximity

The state or condition of being close or near; in psychology, it often refers to how physically close people are to each other, which can influence relationships and social interactions.