In Which of the Following Situations Is a Court Most

question 74

Multiple Choice

In which of the following situations is a court most likely to find substantial performance?

• A) KM Corporation orders 500 boxes of copy paper from MK supply, but MK can deliver only 450 boxes.
• B) Young orders a set of four specially made chrome rims for her car, but the supplier can deliver only three.
• C) Olivia orders 3 gallons of paint for the exterior of her house, based on square footage covered and needed, but the paint supplier can deliver only 2 gallons.
• D) April orders a fully equipped car from a dealer, but although perfect in every way, the car delivered has an automatic transmission rather than the manual transmission that she ordered.

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Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered, and thus should not affect future investment or business decisions.

Variable Costs

Expenses that directly fluctuate in relation to the amount of goods produced or the volume of sales.

Total Fixed Cost

The sum of all costs that do not change with the level of output or sales in the short term, such as rent and salaries.

Activity Bases

Metrics used to allocate costs based on various activities or drivers that cause costs to be incurred.