Diana and Earl Incorporate Their Computer Technical Support Business as Fast

question 14

Essay

Diana and Earl incorporate their computer technical support business as Fast Aid,Inc.Diana contracts with Gina to respond to Fast Aid's cus?tomer service calls on a commission basis.What are the advantages and disadvantages to Fast Aid of classifying Gina as an independent contrac?tor rather than as an employee? Earl obtains a loan from First National Bank and signs a promissory note for repayment of the amount without indicating that he is doing so on behalf of Fast Aid.Fast Aid does not make enough profit its first year to make payments on the loan.Charging default,the bank files a suit against Earl for the unpaid amount.Earl re?sponds that he was acting on behalf of Fast Aid.Will the bank succeed against Earl? Why or why not?

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Definitions:

Model 240 Machine

A hypothetical or specific name for a machine, possibly denoting a particular model or type used in manufacturing or industrial settings.

Contribution Margin

The amount of revenue remaining after deducting variable costs, available to cover fixed costs and contribute to profits.

Selling Price

The selling price of a product or service to buyers.

Differential Cost

The difference in total cost that will result from selecting one option over another in decision-making processes.