Priscilla,who Worked for a Dry Cleaner,came Up with a Great

question 113

Multiple Choice

Priscilla,who worked for a dry cleaner,came up with a great new idea for a type of press that speeded up the process immensely.She quit her job,hired labor and purchased materials,and manufactured a number of the presses.She sold the presses to her friend Phil for resale.Phil began advertising and distributing the press,but was notified by ABC Company that the sales violated its patent.After investigation,Phil determined that ABC had the better argument and demanded that Priscilla refund the purchase price.Priscilla declined on the basis that she had no idea that a patent on a similar press was in existence.Who will likely win the dispute and why?

• A)Phil will likely win,because Priscilla violated the implied warranty of merchantability.
• B)Phil will likely win,because Priscilla violated the implied warranty of fitness for a particular purpose.
• C)Phil will likely win,because Priscilla violated the warranty of title.
• D)Priscilla will likely win,because she had no knowledge of any previous patent.
• E)Priscilla will likely win,because she had no knowledge of any previous patent and because the duty was on Phil to investigate whether any patents existed prior to his purchase of the presses.

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, improving costing accuracy.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing more accurate product cost information.

Activity-Based Costing

An accounting method that identifies and assigns costs to overhead activities and then assigns those costs to products.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on the actual consumption of each.