Timothy Is a Construction Worker in One of the Leading

question 20

Multiple Choice

Timothy is a construction worker in one of the leading firms of a city. His employment contract includes a clause which says he cannot work as a construction worker within the city for fifteen years once he leaves the company. This clause is:

• A) illegal as it is injurious to public service.
• B) only illegal if it violates state or federal antitrust laws.
• C) illegal as a contract in restraint of trade.
• D) legal because the employer can add any constraint to the agreement.

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Definitions:

Actual Costs

The true expenses incurred in the production of a product or the provision of a service, as opposed to estimated or budgeted costs.

Material Variance

Material variance is the difference between the actual cost of materials used in the production process and the expected (or standard) cost, used to analyze and control costs in manufacturing.

Standard Cost

Standard cost is an estimated or predetermined cost of performing an operation, producing a good, or delivering a service, under normal conditions, used for budgeting and assessing performance.

Materials Price Variance

The difference between the actual cost and the standard cost of materials multiplied by the quantity purchased.