Stark Enters into a Contract with a Contractor to Build

question 80

Multiple Choice

Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will greatly benefit from this contract since his convenience store is adjacent to the mall. Donner in this instance is:

• A) an implied beneficiary.
• B) a partial beneficiary.
• C) a donee beneficiary.
• D) an incidental beneficiary.

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Definitions:

Variable Expenses

Expenditures that fluctuate in alignment with the quantity of production or sales figures, like labor costs and materials used.

Traceable Fixed Expenses

Fixed expenses that can be directly linked to a specific segment of a business and would disappear if the segment did not exist.

Contribution Margin

The difference between the sales revenue of a product and its variable costs, indicating how much contributes to covering fixed costs and generating profit.

Variable Expenses

Costs or expenses that change in proportion to business activity levels or volume, such as sales commissions or raw material costs.