Which of the Following Best Describes Contracts

question 8

Multiple Choice

Which of the following best describes contracts?

• A) They are agreements that are enforceable in a court of law.
• B) They are oral agreements that are enforceable by the government.
• C) They are needed to start a business.
• D) They involve forcing one party to perform his or her obligations.

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Definitions:

Variable Costing

An accounting method that only assigns variable costs to inventory, treating fixed costs as period expenses.

Manufacturing Overhead Costs

Indirect costs associated with manufacturing, which are not directly attributable to specific units produced, such as maintenance, utilities, and salaries of indirect labor.

Net Operating Income

Earnings from a company's core business operations, excluding deductions for interest and taxes.

Gross Margin

represents the difference between revenue and cost of goods sold divided by revenue, showcasing the percentage of sales that exceeds the cost of goods sold.