The ACME Toaster Company Was Searching for a Supplier of Wire

question 14

Multiple Choice

The ACME Toaster Company was searching for a supplier of wire heating elements for its toasters.It located the XYZ Element Company which also supplied good quality elements to the Pop-Up Toaster Company,ACME's main competitor.In order to fill ongoing standing orders for elements,XYZ required ACME to complete a credit survey identifying ACME's bank and trade credit references.ACME,which was in financial difficulty,provided a bank account number which actually belonged to the president personally and in which there were substantial deposits.ACME also wrote a letter to the operations manager of XYZ stating that ACME could purchase the entire production of XYZ's elements and that if XYZ would agree to ACME being its exclusive elements customer,ACME would guarantee the purchase of XYZ's annual production at 1% above the price paid by Pop-Up.XYZ was delighted.It informed Pop-Up that it would no longer be able to meet its supply requirements,effective immediately.ACME received its first shipment of elements within a week.

• A)XYZ has committed the tort of fraudulent conversion of goods.
• B)XYZ has committed the tort of deceit.
• C)ABC may sue for damages actually suffered.
• D)ABC may sue for punitive damages.
• E)None of the responses are correct.

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Definitions:

Machine-Hours

A measure of production volume or activity based on the number of hours machines are operated in the manufacturing process.

Applied Manufacturing Overhead

Costs related to production that are not directly associated with the product but are allocated to it, such as utilities or maintenance expenses of the production facility.

Job Cost Sheet

A document that records the costs associated with a specific job, including materials, labor, and overhead.

Direct Labor-Hours

A measure of the total hours worked by employees directly involved in the production process.