Which of the Following Is True of an Agent's Undisclosed

question 74

Multiple Choice

Which of the following is true of an agent's undisclosed self-dealing?

• A) It does not violate the duty of loyalty.
• B) The principal cannot rescind purchases made.
• C) The principal can ratify the purchase.
• D) The principal must accept liability.

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Definitions:

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit of material.

Malfunctioning Equipment

Equipment that is not operating correctly or as expected, often leading to operational inefficiencies or safety concerns.

Spoilage

Wasted or defective materials during the production process that cannot be repaired or sold.

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the standard cost, indicating how much the actual labor rate deviates from the expected standard.