Jesse Makes an Offer to Ike,and Ike Accepts;then the State

question 38

Multiple Choice

Jesse makes an offer to Ike,and Ike accepts;then the state legislature passes a law that makes performance of the contract illegal.What is the effect of the new statute on the contract?

• A) The contract is severed;any portions that are legal must still be performed and any portions that have been made illegal must not be performed.
• B) The statute has no effect on the contract.
• C) The statute acts as a condition on the contract.
• D) The statute discharges the obligations of both parties under the contract.

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Definitions:

Direct Labor

The labor costs of employees who are directly involved in the production of goods, an element of production costs.

Master Budget

A comprehensive financial plan that includes all of a company's budgets and financial plans.

Hourly Cost

The expense incurred for each hour of work performed, often used to calculate labor costs or pricing for services.

Variable Selling

Costs that vary directly with the volume of sales, such as commissions and shipping charges.