Litto Fray's Produces Corn Chips An Outside Supplier Has Offered to Produce the Corn Chips

question 13

Multiple Choice

Litto Fray's produces corn chips.The cost of one batch is below: $$\begin{array} { l l } \text { Direct materials } & \$ 18.00\\\text { Direct labour } & 13.00 \\\text { Variable overhead } & 12.00 \\\text { Fixed overhead } & 14.00\end{array}$$ An outside supplier has offered to produce the corn chips for $26 per batch.How much will Litto Fray save if it accepts the offer?

• A)$2.00 per batch
• B)$17.00 per batch
• C)$31.00 per batch
• D)$6.00 per batch

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Definitions:

Limitation Clauses

Provisions in a contract or law that restrict the time period within which a legal action can be brought or certain rights can be enforced.

Insurance Contracts

Agreements between an insurance provider and an individual or entity, outlining the terms for coverage against specified risks in exchange for premiums.

Clause Ambiguity

A situation where a provision in a contract or document can be interpreted in more than one way, leading to uncertainties or disputes.

Self-Governing

The ability of a community, organization, or group to exercise control and make decisions independently from external authorities.