Which of the Following Is Not a Reason Why Exemption

question 40

Multiple Choice

Which of the following is not a reason why exemption clauses are attractive?

• A) They enable a supplier of goods and services to keep its prices low because there is no need to increase prices to cope with risk.
• B) If the supplier is sued for damages. it can completely disclaim liability.
• C) The supplier is able to enter into a contract with a third party.
• D) If the supplier uses a standard form contract it will have an advantage over the other party because it can prepare the form to suit itself.
• E) all of the above

---

Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their use of activities.

Budgeted Cost

The forecasted cost of a project or operation, set during the budgeting process and used for planning and control purposes.

Activity Rates

Rates used in activity-based costing to allocate indirect costs to specific products or services based on the activities required to produce them.

Activity Levels

Varying levels of operational or production activity in a company, which can affect budgets and costs.