Anthony Contracted with a Company to Participate in a Shark

question 17

Multiple Choice

Anthony contracted with a company to participate in a shark feeding excursion.He signed an exculpatory clause as one of the contract provisions at the time that he signed up.He was later injured by a shark during the dive.He wants to sue the company for his injuries.What is the most likely result?

• A) The company will be liable because it is engaging in an ultra-hazardous activity.
• B) The company will be liable because it has an absolute duty to protect guests.
• C) The company will not be liable because everyone knows that sharks are dangerous.
• D) The company will not be liable because the exculpatory clause will most likely release the company from liability.

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Definitions:

Variable Costing

An accounting method that considers only variable production costs (costs that change with the level of output) in the calculation of product costs.

Unit Product Cost

The total cost associated with producing one unit of a product, including both variable and fixed costs.

Variable Costing

An accounting method that includes only variable production costs (direct labor, direct materials, and variable manufacturing overhead) in product costs.

Cost-Volume-Profit Analysis

An accounting technique used to determine how changes in costs and sales volume affect a company's operating income and net income.