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lbvjy [14]
3 years ago
11

Dozier and his wife, daughter, and grandson lived in the house Dozier owned. At the request of the daughter and grandson, Pascha

ll made some improvements to the house. Dozier did not authorize these, but he knew that the improvements were being made and did not object to them. Paschall sued Dozier for the reasonable value of the improvements, but Dozier argued that he had not made any contract for such improvements. Was he obligated to pay for such improvements?
Business
1 answer:
liubo4ka [24]3 years ago
6 0

Answer: Yes

Explanation: In the above case, a quasi-contract was formed. This is when a bilateral contract is not in place but one party will enjoy the benefit of the activities of the other party and may be enriched  by it.  

A bilateral agreement is the exchange of a promise for another and in this case would have been, the promise that Dozier would pay for Paschall’s work. This was not established, however, Dozier will benefit from Paschall’s work unduly if he does not pay for the improvements. The law holds that he has to pay for Paschall’s work to prevent being unjustly enriched.

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I solved this manually. please try to follow up with the calculations.

ending inventory balance of

a. Raw material = $31000

b. work in progress = $49000

c. finished goods = $19000

Explanation:

<u>for</u><u> </u><u>raw</u><u> </u><u>material</u><u>:</u><u>-</u>

balance at beginning 30,000 + purchase of 125000 - issue of 124000

= 30000+125000-124000

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the ending balance is 31000

<u>for work in progress inventory:-</u>

beginning inventory 45000 + 124000 current cost of issued material + 162000 direct wages + overhead 24000

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we subtract 306000 costs of goods manufactured from this value

= $355000-306000

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<u>for</u><u> </u><u>finish</u><u>ed</u><u> </u><u>goods</u><u> </u><u>inven</u><u>tory</u><u>:</u><u>-</u>

begining inventory 14000 + 306000 costs of goods manufactured - 301000 costs of goods sold

= 14000+306000-301000

= $19000

<u>2</u><u>.</u><u> </u><u>schedule</u><u> for</u><u> </u><u>costs</u><u> </u><u>of</u><u> </u><u>goods</u><u> </u><u>manu</u><u>factured</u><u>:</u><u>-</u>

beginning inventory 30000 + purchase 125000 - ending inventory

= 30000+125000-31000

= 124000

124,000+162000 labour cost+24000

<u>total cost of manufacturing = 310000</u>

310000+begining wip of 45,000 - ending inventory of 49000

= 310000+45000-49000

= 306,000 costs of goods manufactured

we add this value to beginning inventory of finished goods-ending inventory

= 306000+14000-19000

= $301000 costs of goods sold

3. income statement:-

revenue of 400000 - 301000 costs of good sold = 99000

99000-36000 selling expenses

= $63000

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