Sylvia Had Contracted with Produce Palace to Sell Her Entire

question 180

Multiple Choice

Sylvia had contracted with Produce Palace to sell her entire crop of elephant garlic (100 kilograms) and her entire crop of tomatoes (100 kilograms) . On the day for delivery, Produce Palace took the garlic but not the tomatoes. In her effort to mitigate her loss, Sylvia called the owner of Val's Veggies and offered her the tomatoes at a reduced price with the words, "Let me know quickly, because they are ripe and must be moved out today." That afternoon, Val sent Sylvia a letter accepting the offer. On these facts, which is the most likely outcome?

• A) There is a contract between Sylvia and Val the moment Val dropped the letter of acceptance in the mailbox.
• B) There is a contract between Sylvia and Val the day the letter of acceptance is received by Sylvia.
• C) There is no contract between Sylvia and Val because Sylvia had revoked the offer.
• D) There is no contract between Sylvia and Val because the offer has probably lapsed before the acceptance was received by Sylvia.
• E) If the postbox rule does not apply, there would be a contract as soon as Val mailed the letter unless Sylvia had sold the tomatoes to someone else.

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Definitions:

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including those related to running the factory outside direct labor and materials.

Job-Order Costing System

A cost accounting system in which costs are assigned to specific jobs or orders, used in industries where goods or services are produced to order.

Machine-Hours

A measure of production time which quantifies the number of hours a machine is in operation.

Overhead Applied

The portion of overhead costs that are allocated to products or cost objects based on a predetermined overhead rate.