Under the Uniform Commercial Code,an Agreement Modifying a Contract

question 21

Multiple Choice

Under the Uniform Commercial Code,an agreement modifying a contract

• A)always requires consideration.
• B)requires consideration only when the sale of goods is involved.
• C)may not require consideration.
• D)requires consideration only when one of the parties is incompetent.

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Definitions:

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance.

Variable Costs

Expenditures that adjust based on the quantity of production or the scale of sales.

Utility Rates

Charges imposed by utility companies for the use of services such as electricity, gas, water, and sewer.

Contribution Margin

The amount by which the sale of a product or service exceeds its variable costs, used to cover fixed costs and contribute to net income.