If the Seller Fails or Refuses to Deliver the Goods

question 34

True/False

If the seller fails or refuses to deliver the goods called for in the contract, the buyer can purchase substitute goods; this is known as rescission.

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Definitions:

Margin Of Safety

The difference between actual or expected sales and the break-even point, indicating the level of risk in failing to cover fixed costs.

Breakeven

The point at which total costs and total revenue are equal, resulting in no net loss or gain.

Sales

The exchange of a commodity or service for money; the action of selling something.

Variable Costing

A costing method that includes only variable manufacturing costs (direct materials, direct labor, and variable manufacturing overhead) in product costs and treats fixed manufacturing overhead as a period expense.