Consideration in a Contract May Be More Than Just the Promises

question 25

True/False

Consideration in a contract may be more than just the promises exchanged by the parties; it may include the actual benefit gained and the detriment suffered by them.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much contributes towards covering fixed costs and generating profit.

Variable Costs

Costs that change in proportion to the level of activity or volume of production in a business.

Pretax Income

The amount of income that a company earns before any taxes are deducted.

Variable Cost

Costs that vary in direct proportion to changes in the level of production or sales activity.