Without Ted's Knowledge, Phil, Who Frequently Purchased Lumber on Ted's

question 35

True/False

Without Ted's knowledge, Phil, who frequently purchased lumber on Ted's behalf, purchased a large quantity of plywood from Chris as agent for Ted. Phil later advised Ted of the purchase. As an agent, Phil must make certain that his principal is in existence at the time the contract is negotiated, otherwise, he would be liable for breach of warranty of authority.

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Definitions:

Total Cost Line

A graphical representation showing the total cost associated with producing various levels of output.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed costs in a company's cost structure.

Operating Income

The profit realized from a business's core operations, calculated before interest and taxes are deducted.

Break-even Point

The level of production or sales at which total costs equal total revenue, meaning no net loss or gain is incurred; a crucial financial analysis metric.