Implied Contract May Become Binding When Management Urges an Employee

question 34

True/False

Implied contract may become binding when management urges an employee to leave another organization by promising higher wages and benefits and then reneging after the person has been hired.

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Definitions:

Margin Of Safety

The difference between actual sales and the break-even point. It measures how much sales can fall before a business incurs a loss.

Variable Costs

Expenditures that adjust based on the degree of operational activity or the volume of goods manufactured.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales activities.

Contribution Margin Ratio

A metric that shows what percentage of sales revenue is available to cover variable costs and contribute to fixed costs after all variable expenses have been covered.