At 17 Years Old,Otto Signed a Contract to Purchase a New

question 3

Multiple Choice

At 17 years old,Otto signed a contract to purchase a new Hummer by advancing a payment of $50,000.However,when Otto turned 20,he wished to disaffirm this contract.Does the law permit this?

• A)Yes,because he was a minor when he signed the contract.
• B)Yes,because he is not yet 21 years of age.
• C)No,because a car is a "necessary."
• D)No,because Otto implied his ratification.

---

Definitions:

Overhead Cost

Expenses related to the operation of a business that cannot be directly linked to a specific product or service.

Customer Margin

The profit generated from a particular customer, calculated by subtracting the costs directly associated with serving them from the revenue they generate.

Activity-based Costing

A costing method that assigns costs to products or services based on the activities and resources that contribute to their creation and delivery.

Activity Cost Pools

Groupings of individual costs based on the activities that drive them, used in activity-based costing to allocate costs more accurately.