A Contract Most Likely Will Be Declared Unconscionable If

question 27

Multiple Choice

A contract most likely will be declared unconscionable if:

• A)it is unfair to one party.
• B)it contains a cancellation clause.
• C)it is oppressive and the weaker party did not fully understand the consequences of the agreement.
• D)it lacks valid consideration.

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Definitions:

Variable Overhead

Costs that vary with the level of production or business activity, such as utilities or materials, in contrast to fixed overhead costs.

Direct Labor

The wages or costs associated with workers who are directly involved in the manufacturing or production of goods or services.

Direct Materials

Raw materials that are directly attributed to the production of a product and are easily traceable to the manufacturing process.

Variable Overhead

Costs that vary with the level of production output, such as utilities for manufacturing equipment, which increase as production increases.