William Has a Contract to Build a New Office Building

question 59

Multiple Choice

William has a contract to build a new office building for Angela.The contract contains a provision requiring William to furnish a certificate of occupancy from the building inspector before Angela is required to pay.This provision is:

• A) an express condition.
• B) an implied-in-fact condition.
• C) an implied-in-law condition.
• D) a condition subsequent.

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Definitions:

Predetermined Overhead Rate

A rate used to apply manufacturing overhead costs to products, calculated before the production period begins based on estimated costs and activity levels.

Automated Production Line

A manufacturing process involving the use of robotics and computer-controlled equipment to perform a sequence of operations automatically.

Direct Labor-Hours

The total number of labor hours spent by workers directly involved in the production process.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate estimated overhead costs to products or job orders based on a selected activity base.