Cotton Corp Currently Makes 10,000 Subcomponents a Year in One

question 38

Multiple Choice

Cotton Corp currently makes 10,000 subcomponents a year in one of its factories.The unit costs to produce are: An outside supplier has offered to provide Cotton Corp with the 10,000 subcomponents at a $84.50 per unit price.Fixed overhead is not avoidable.What is the maximum price Cotton Corp should pay the outside supplier?

• A)$65.00
• B)$84.50
• C)$91.00
• D)$58.50

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Definitions:

Non Est Factum

A legal defense claiming a person signed a document without understanding its nature due to a fundamental mistake.

Duress

A situation where a person is forced or compelled to act against their will or to enter into a contract due to threats, violence, or other pressure.

Unconscionability

A legal doctrine that describes terms in a contract that are so unjust or overwhelmingly one-sided that they are deemed unenforceable.

Misrepresentation

A false statement of fact made by one party to another, which induces the latter to enter into a contract or agreement.