Big Bad Wolf Masonry Co. agreed to build a brick home for Johnny Little Pig, the Third by November 1. Big Bad Wolf and Johnny Pig could not predict Pig's losses of Big Bad Wolf failed to complete the house on time. They estimated that Johnny Pig would lose $150 in storage and rental fees per day if the building was not completed on time. The contract contained a liquidated damage clause. The clause required Big Bad Wolf to pay liquidated damages of $150 per day if the work was completed late. Big Bad Wolf finished the home twelve days late. Johnny Pig actually lost $1,000 because of the breach. Is the liquidated damage amount stated in the contract between Big Bad Wolf Masonry and Johnny Pig a valid or invalid liquidated damage clause and why

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?