A Salesman Innocently Misrepresented a Fact About a New Printer

question 161

Multiple Choice

A salesman innocently misrepresented a fact about a new printer to a customer.He honestly believed that his statement was true and was not careless.Although this fact was not about a term of the contract,it did induce the customer to buy that printer.The next day,the customer learned the true facts and wanted to return the printer.If the store refused to take it back and the customer sued,which of the following would be the most likely result?

• A)the buyer's case would be dismissed
• B)an injunction
• C)an order of rescission
• D)an award of damages
• E)an order of specific performance

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Definitions:

Variable Overhead

Costs that change in proportion to the level of manufacturing or service activities, such as materials and utilities.

Labour Efficiency Variance

It measures the effectiveness of labor usage by comparing the budgeted hours for a set level of production against the actual hours worked, indicating efficiency or inefficiency in labor use.

Static Budget

A budget that does not change or adjust over the period, established at the start of a period and based on a fixed level of activity.

Standard Costing

A cost accounting system that assigns a fixed cost to inventory with the variance analyzed to improve cost control and management decisions.