Abner Operates a Small Repair Business and Is in Desperate Need

question 16

Multiple Choice

Abner operates a small repair business and is in desperate need of a certain type of building material. He obtains the material from a large corporation, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of:

• A) in pari delicto .
• B) partial illegality.
• C) substantive unconscionability.
• D) procedural unconscionability.

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Definitions:

Direct Labor

Workers actively engaged in manufacturing products or providing services, whose labor directly contributes to output.

Finished Goods

Products that have completed the manufacturing process but have not yet been sold or distributed to the end customer.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, estimated before the costs are incurred.

Factory Overhead

The total of all the indirect costs associated with manufacturing, not including direct labor or direct materials.