When a Warranty in a Contract Has Been Breached What

question 22

Multiple Choice

When a warranty in a contract has been breached what remedies are available to the innocent party?

• A)Termination of the contract or damages or both remedies.
• B)Damages and injunctions.
• C)Damages only.
• D)Termination of the contract or an order for specific performance or both remedies.

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Definitions:

Period Costs

Costs that are expensed in the period in which they are incurred, rather than being capitalized or included in the cost of goods sold, such as selling, general, and administrative expenses.

Direct Materials

Raw materials that can be directly associated with the production of goods, clearly identifiable and allocable to specific products or jobs.

Factory Overhead

The total of all indirect costs associated with manufacturing, including indirect labor, materials, and expenses not directly tied to the production of goods.

Manufacturing Costs

Expenses directly related to the production of goods, including direct labor, direct materials, and overhead costs.