Which of the Following Is Correct with Regard to a Contract

question 32

Multiple Choice

Which of the following is correct with regard to a contract entered into with a third person by an agent of an undisclosed principal?

• A) The agent has no liability to the third person if the agent has acted within the scope of her authority.
• B) The agent is personally liable upon the contract.
• C) The undisclosed principal has no liability on the contract, even if her existence and identity are discovered by the third person.
• D) If the third party obtains a judgment against the principal and the judgment is satisfied, the agent may still have liability to that third party.

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Definitions:

Machine-Hours

A measure of the amount of time a machine is used during the production process, often used in costing and budgeting.

Direct Labor-Hours

The number of hours spent by workers directly involved in the manufacturing of a product or delivery of a service.

Manufacturing Overhead

The indirect production costs that are not directly associated with the manufacturing of products, such as utilities and rent for the manufacturing facility.

Predetermined Overhead Rate

A computed rate used for applying overhead costs to products or job orders, calculated before the period begins based on estimated costs.