Urban City and Thru-Way Construction Company Enter into a Contract

question 9

Multiple Choice

Urban City and Thru-way Construction Company enter into a contract that includes calculations.Urban,whose engineer,Sergei,compiled the figures,discovers later that some numbers were added incorrectly,but Thru-way refuses to make changes.Urban can

• A)not rescind the contract.
• B)rescind the contract on the basis of fraud.
• C)rescind the contract on the basis of mistake.
• D)rescind the contract on the basis of duress.

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Definitions:

Budget Variance

The difference between the actual fixed overhead costs and the budgeted fixed overhead costs for the period.

Applied

Refers to the process of allocating or assigning costs to a specific cost object in a manner that is consistent with the usage or benefits derived from it.

Denominator Activity Level

A term used in cost accounting to represent the total activity or volume that is used to allocate fixed costs to units of output.

Standard Cost System

A cost accounting system that uses cost units determined in advance for materials, labor, and overhead to estimate the cost of production.