Ken Promises Not to Foreclose on a Mortgage That He

question 71

Multiple Choice

Ken promises not to foreclose on a mortgage that he holds on an office complex that Christopher owns.In reliance on this promise,Christopher expends $200,000 to remodel the complex.Which of the following is correct with regard to Ken's promise?

• A) Ken's promise not to foreclose is unsupported by consideration.
• B) Ken's promise is noncontractual.
• C) Ken's promise will be enforced against him based upon the doctrine of promissory estoppel.
• D) All of these.

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Definitions:

WIP

An acronym for Work In Progress, which refers to the materials and products that are in the process of being manufactured but are not yet complete.

Underapplied Overhead

A situation where the estimated overhead expenses are lower than the actual costs incurred, creating a variance in financial reporting.

Overapplied Overhead

A situation where the amount of manufacturing overhead allocated to products exceeds the actual overhead costs incurred.

Work in Process Inventory

Refers to the portion of inventory that is currently in the production process but has not yet been completed.