The Owner of a Small Business Is Having Lunch with an Employee.He

question 54

Multiple Choice

The owner of a small business is having lunch with an employee.He says,"I'm so tired of the problems that we are having lately that I would sell the entire business to you now for a nickel!" The employee quickly slams a nickel on the table and exclaims,"I accept!" Is there a valid contract?

• A) Yes; the offer was made and accepted in a timely fashion.
• B) Yes; the offer was made and the employee conferred the requested consideration.
• C) No; the consideration is inadequate for the purchase.
• D) No; there is a lack of objective intent.

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Definitions:

Controllable Variance

Controllable variance refers to the difference between actual and expected figures that can be influenced by the actions of managers.

Overhead Costs

General expenses related to the operation of a business that are not directly attributed to creating a product or service.

Volume Variance

The difference between the budgeted and actual quantity of units sold or produced, affecting budget and operational planning.

Fixed Overhead

The costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.