Fact Pattern 10-3

question 25

Multiple Choice

Fact Pattern 10-3
Sally contracts with Tasty Pizza Company to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract.
-Refer to Fact Pattern 10-3. The next day, Sally changes her mind and again offers to deliver Tasty's products. Tasty is willing to deal, but for a new price. Sally and Tasty

• A) may agree to a new contract, but it cannot include a new price.
• B) may agree to a new contract that includes the new price.
• C) must perform their original contract.
• D) must perform the part of their original contract that is executory.

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Definitions:

Activity-based Costing

A method of accounting where costs are assigned to products or services based on the activities needed for their production.

Activity-based Costing

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

Manufacturing Overhead

All indirect costs associated with the production process, including costs of materials, utilities, and maintenance that are not directly associated with the manufacturing of a specific product.

Activity-based Costing

An accounting approach that assigns costs to products or services based on the resources they consume, aiming for more accurate cost allocation.