Fact Pattern A Central Construction Company (CCC) begins building a restaurant for Diners Cafe Corporation, but after two months demands an extra $100,000. Diners agrees to pay. Refer to Fact Pattern A. If CCC offers, as a reason for the extra $100,000, that ordinary business expenses have increased, the agreement is a. enforceable as an accord and satisfaction. b. unenforceable due to the preexisting duty rule. c. unenforceable as an illusory promise. d. enforceable because of unforeseen difficulties.

Lynch company manufactures and sells a single product. the following costs were incurred during the company’s first year of operations: variable costs per unit: manufacturing: direct materials $ 12 direct labor $ 6 variable manufacturing overhead $ 1 variable selling and administrative $ 1 fixed costs per year: fixed manufacturing overhead $ 308,000 fixed selling and administrative $ 218,000 during the year, the company produced 28,000 units and sold 15,000 units. the selling price of the company’s product is $56 per unit. required: 1. assume that the company uses absorption costing: a. compute the unit product cost. b. prepare an income statement for the year. 2. assume that the company uses variable costing: a. compute the unit product cost. b. prepare an income statement for the year.