If Slick Shades, a sunglasses manufacturer, has a contract with Best Lens, a lens manufacturer, to supply lenses needed to make the sunglasses, and the managers of the two firms both paid lawyers' fees to prepare the contract, the lawyer fees are considered to be a(n)______cost.
A)information
B)negotiation
C)monitoring
D)enforcement

Question

Quizplus · Accepted Answer

The lawyers' fees paid to prepare the contract between Slick Shades and Best Lens are considered a negotiation cost because they were incurred during the process of reaching an agreement between the two firms. These costs are typically associated with haggling over the terms of the contract and finalizing its details.

If Slick Shades, a Sunglasses Manufacturer, Has a Contract with Best