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satela [25.4K]
2 years ago
11

MLS Construction LLC asked MD Drilling and Blasting Inc. to do rock drilling and blasting work required for an excavation projec

t. MD had previously done work for MLS but had not been fully paid. MD agreed to do the work if MLS made a significant payment on the balance due. MLS agreed and gave MD a check for $15,000. MD began work and the same day faxed an unsigned written airpayment to MLS. Two weeks later, MD learned that MLS had stopped payment on the check. MD stopped work on the project and sued MLS for breach of contract. MLS argued that the unsigned agreement that MD faxed revoked the original offer, and therefore there was no contract. Did it?
Business
2 answers:
Lemur [1.5K]2 years ago
7 0

Answer:

MD did not revoke their offer, so the contract was valid.

Explanation:

First of all, in order for an offer to be revoked, it must be done before the other party accepts the offer. Once the other party accepted the offer, a contract is formed. E.g. the offeror made a promise but revoked it before the offeree accepted, it is not valid anymore. But this didn't happen in this case, both sides agreed on the offer, so a binding contract exists.

MLS cannot revoke its offer at will simply because they want to, specially after receiving something of value in exchange. MD had already began working, so they had already given consideration to MLS.

In order for a revocation to be valid, it must be communicated to the other party before the acceptance, and that didn't happen here. Just because someone in MLS shouted out loud or told a friend that the offer was revoked, doesn't revoke it.

ozzi2 years ago
3 0

Answer:

Yes of course,the statement is true as the cheque that Mr. MLS gave him was not accepted in written format and when the written agreement was faxed , then also it was not signed by the required authorities. thus there is no authentication that it was agreed upon or not.

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Explanation:

1. Journal entry to record bad debt on January 31st

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Jan. 31st      Allowance for doubtful account            $1,600

Account receivables  ( Customer C. Green)                                  $1.600

2. Journal entry to record recovery of bad debt on March 9

A) To reinstate Amount previously written off

Date            Account Titles and Explanation                  Debit            Credit

March 9 Account receivables  ( Customer C. Green)    $1,100

Allowance for doubtful account                                                          $1,100

B) To record payment of account

Date            Account Titles and Explanation             Debit            Credit

March 9            Cash                                                   $1,100

   Account receivables( Customer C. Green)                                  $1,100

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3 years ago
Xia Co. currently buys a component part for $5 per unit. Xia believes that making the part would require $2.25 per unit of direc
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Answer:

Xia Co.

1-a. The relevant costs for Xia Co. to make or buy the part:

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Direct labor                   1.00

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1-b. Xia should make the part.  It will cost Xia $4.00 to make the component while it costs it $5.00 to buy.  It should therefore, make the component.

Explanation:

a) Data and Calculations:

Price of buying component = $5

Cost of making component:

Direct materials         $2.25

Direct labor                   1.00

Incremental overhead 0.75

Total relevant cost    $4.00

b) The relevant cost for making the component is $4.00.  The overhead cost based on 200% direct labor is not a relevant cost.  It is an allocated fixed cost and must be incurred whatever decision is taken.  By making the component, Xia Co. will be netting in a unit contribution of $1 ($5.00 - $4.00) with the alternative of buying.

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Answer:

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Step 1

<u>Units Available For Sales Calculation :</u>

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Step 2

<em>Unit Cost = Total Cost ÷ Units Available for Sale</em>

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Step 3

<em>Ending Inventory = Units in Stock × Unit Cost</em>

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