If Not Expressly Agreed by the Parties in Their Contract

question 1

Multiple Choice

If not expressly agreed by the parties in their contract, the risk of loss of goods falls upon

• A) the purchaser because of the implied condition regarding transfer of title.
• B) the vendor, if the goods are in transit to the purchaser F.O.B. the vendor's warehouse.
• C) the purchaser, if the goods are in transit on a C.O.D. basis.
• D) the vendor, if the goods are in his possession because he must weigh or measure them for the purpose of ascertaining price.
• E) the vendor, if the goods are in his possession for any reason.

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Definitions:

Total Raw Materials

The full amount of raw materials required for production, including both materials currently in stock and those needed to complete production.

Raw Materials Inventory

The stock of unprocessed inputs kept on hand by a manufacturing company for use in production.

Purchases

The acquisition of goods or services by a company in exchange for money, which are either used in the process of production or sold to customers.

Total Direct Materials

The sum cost of all raw materials that are directly traceable to the manufacturing of a product.