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10th Edition
ISBN: 9781337605656
Author: CROSS
Publisher: CENGAGE L
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Chapter 12, Problem 6BCP
Summary Introduction

Case summary: A global corporation APS entitled LLC to hire a small trade contractor L to perform preservation work on a certain project. L was not paid for his work. So, he filed a recovery suit against APS. Before the trail, L emailed the terms of settlement to the corporation APS, and it agreed on that terms in response. After two days, APS again emailed a different settlement agreement containing additional terms to L.

To find: The proposal likely to satisfy the elements of an agreement to establish a contract.

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Belle Garments manufactures customized T-shirts for football teams. The business uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost. The business operates at a profit margin of 33% on sales. Belle Garments expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2025. At the end of December 2024, Belle Line Garments reported work in process inventory of $93,980 - Job FBT 101 - $51,000 & Job FBT 102 - $42,980 The following events occurred during January 2025. i) Purchased materials on account, $388,000. The purchase attracted freight charges of $4,000 ii) Incurred manufacturing wages of $400,000 iii) Requisitioned direct materials and used direct labour in manufacturing. Job # FBT 101 FBT 102 FBT 103 FBT 104 Direct Materials $70,220 97,500 105,300 117,000 iv) Issued indirect materials to production, $30,000. Direct Labour $61,200…
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