Assume You Are the Judge in the Palsgraf Case

question 67

Essay

Assume you are the judge in the Palsgraf case.
a. Analyze the fact situation in terms of the elements that need to be proved in a negligence case.
b. Why did Mrs. Palsgraf lose the case? What in the fact situation makes it difficult to establish a prima facie case of negligence?

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Definitions:

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or services, calculated based on estimated costs and activity levels before the actual costs are known.

Overhead Efficiency

The effectiveness with which a company utilizes its overhead, often analyzed through the comparison of actual overhead costs with budgeted or standard costs.

Predetermined Overhead Rate

A rate derived from dividing estimated overhead costs by an estimated activity base, used to apply manufacturing overhead to products or job orders.

Variable Component

The part of a cost or expense that varies directly with the level of activity or production volume, such as direct materials or variable manufacturing overhead.