Mabel and Leon Were Having Marital Problems and Had an Argument

question 85

Multiple Choice

Mabel and Leon were having marital problems and had an argument one morning over whether or not Leon should buy a motorbike.Mabel went to her sister Nancy's home where the two women talked about life and drank vast quantities of wine.Very drunk,Mabel decided everything was her fault.She went to a local motorbike store,selected one she knew Leon wanted,but had rejected as being too expensive,and paid for it with her credit card.The salesman had no idea she was drunk.The next day,she had no memory of the transaction and was horrified to find out what she had done.Mabel discovered the sales slip and the motorbike outside,and called the company at once to tell them she is returning it immediately.

• A)Since she was so drunk that she didn't know what she was doing,Mabel lacked the capacity to make the contract,and cannot be held to it under any circumstances.
• B)Mabel cannot use her own voluntary behaviour in getting drunk to excuse her from responsibility for this contract.
• C)Since Mabel repudiated the contract immediately once she became sober,she cannot be held to it.
• D)Even though Mabel repudiated the contract promptly once she became sober,she can be held to the contract since the salesperson had no idea she was drunk and that she did not know what she was doing.
• E)Since she made the contract to save her marriage,it is a contract for a necessary and,drunk or not,she is bound to it.

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Definitions:

Standard Labor Hours

The set amount of time expected to be used to complete a specific task or manufacture a product under normal conditions.

Direct Materials Quantity Variance

The difference between the actual amount of direct materials used in production and the standard amount expected to be used, valued at the standard cost.

Overhead

Ongoing business expenses not directly attributed to creating a product or service, such as rent, utilities, and administrative costs.

Standard Labor Hours

The predetermined amount of time expected to complete a task or produce a unit of goods under normal conditions.