If a Buyer Has a Basis for Rejecting a Delivery

question 75

Multiple Choice

If a buyer has a basis for rejecting a delivery of goods,the buyer:

• A)should not ask the seller to reship conforming goods.
• B)will still be liable to the seller for breach of the sales contract.
• C)need not act within a specified amount of time.
• D)must give the seller notice of the rejection.

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Definitions:

Standard

A benchmark or guideline used to measure or set the quality, quantity, or value of products or processes.

Variable Overhead Efficiency Variance

The difference between the actual level of activity (direct labor-hours, machine-hours, or some other base) and the standard activity allowed, multiplied by the variable part of the predetermined overhead rate.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on activity levels such as labor hours or machine hours.

Actual Level Of Activity

The real measure of how much work is performed or output is produced in a given period, often compared to planned or standard levels of activity.