One Reason for the Existence of Agency Problems Between Managers

question 81

Multiple Choice

One reason for the existence of agency problems between managers and share holders is that

• A) there is a separation of ownership and control of the firm.
• B) managers know how to manage the firm better than shareholders.
• C) shareholders have unreasonable expectations about managerial performance.
• D) none of the above

---

Definitions:

Direct Labor

The wages and expenses directly associated with workers who physically produce goods or provide services.

Work in Process Inventory

Represents goods that are in the process of being manufactured but are not yet completed.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor costs.

Finished Goods Inventory

The stock of completed products that are ready to be sold but are still in the company's inventory.