Section 402A Provides That Liability Exists Only If the Product

question 50

True/False

Section 402A provides that liability exists only if the product reaches "the user or consumer without substantial change in the condition in which it is sold."

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Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and are considered a variable cost.

Indirect Materials

Materials used in the production process that cannot be directly linked to a specific product, such as lubricants and cleaning supplies used in machinery.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor, such as utilities, depreciation, and maintenance of factory equipment.

Direct Labor Costs

The wages of employees who are directly involved in the production of goods or services.