If Unforeseen Conditions Cause a Partial Inability to Make Delivery

question 4

Multiple Choice

If unforeseen conditions cause a partial inability to make delivery of the goods and thus make performance impracticable, the seller is excused from making delivery.

• A) the seller is readily excused from making delivery.
• B) the seller can unilaterally annul the contract.
• C) the seller must allocate production in any fair and reasonable manner among his customers.
• D) the buyer is required to fully take the risk of loss.

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Definitions:

Direct Labor-Hours

The total hours worked directly on a product by employees.

Plantwide Predetermined Rate

A single overhead absorption rate used throughout an entire factory or plant for allocating overhead costs to products.

Manufacturing Overhead

All indirect costs related to the manufacturing process, including costs of indirect materials, indirect labor, and other expenses that are not directly tied to the production of goods.

Machine-Hours

A measurement unit representing the number of hours a machine is operational and working on production tasks.