What Is the Difference Between the Communication of an Invitation

question 28

Multiple Choice

What is the difference between the communication of an invitation to treat and the communication of an offer to enter into a contract?

• A) An offer to enter into a contract is an expression of a willingness to do business.
• B) An offer to enter into a contract seeks to facilitate commercial profitability.
• C) An invitation to treat expresses an inclination to form a business relationship.
• D) An invitation to treat is a promise to perform specified acts on certain terms.

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Definitions:

Static Budget

A budget based on a set level of activity and does not change in response to changes in business activity levels during the budget period.

Overhead Costs

Indirect costs incurred in the production process or in the provision of services that cannot be directly tied to a specific product or service.

Overhead Allocation

The process of distributing indirect costs to cost objects such as products, services, or business units.

Variable Overhead

Costs that vary indirectly with production volume, such as utilities or indirect materials.