Use the Fact Situation in Q10 to Answer the Related

question 31

Multiple Choice

Use the fact situation in Q10 to answer the related question that follows. The principle of law that arises out of the fact situation above was meant to overcome an earlier principle of law that stated that

• A)payment of a lesser sum terminates the contract.
• B)a contract does not need consideration at all.
• C)a contract is terminated by performance.
• D)payment of a lesser sum in satisfaction of a greater sum is no payment at all.
• E)none of the above

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Definitions:

Selling Price

The amount of money charged for a product or service, typically enough to cover costs and generate profit.

Required Return

The expected gain or loss on an investment over a specified period, factoring in both the risk and the time value of money.

Absorption Costing

A method of costing that includes all manufacturing costs – direct materials, direct labor, and both variable and fixed overhead – in the cost of a product.

New Product

An item or service that has been recently developed or introduced to the market.