Joe Agreed to Paint Sam's House for $1000

question 55

Essay

Joe agreed to paint Sam's house for $1000.Joe then assigned the $1000 claim to Harry,who served notice on Sam about the assignment.When it came time for payment,Harry was informed by Sam that he would not pay because the paint was peeling off his house.Harry said that that was nothing to do with him and demanded payment.Explain the legal position of the parties.

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Definitions:

Absorption Costing

An accounting method that includes all direct and indirect manufacturing costs in the cost of a product.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and variable overhead) in product cost calculations, excluding fixed overhead.

Absorption Costing

A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.