This is a Business Law class. I need to IRAC the following scenario, but I need help determining what my second issue is. I know the first issue is if there is a contract between Jack and Home Depot. Is the second issue negligence? I need some help. Thanks! IRAC Scenario:

Jeff is looking to buy a lawnmower. He sees a Home Department Store (HDS) advertisement in thenewspaper advertising a “Lawnmower 2000” for $199. 00. This lawnmower is manufactured by andsold exclusively at HDS stores. He walks into HDS and asks one of the sales associates to showhim the Lawnmower 2000. The salesperson takes Jeff to the Lawn and Garden section of the storeand shows Jeff the Lawnmower 2000 listed for $199.00. Jeff tells the sales person “I’ll take it” andthe sales person takes the Lawnmower 2000 to the cash register and Jeff pays the $199.00. Whileusing the lawnmower the blade comes off and hits Jeff in his leg causing a severe laceration on hisleg. Jeff spends a day at the hospital and misses two days at work.

Morganton Company makes one product and it provided the following information to help prepare the master budget for its first four months of operations:

a.The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 8,400, 15,000, 17,000, and 18,000 units, respectively. All sales are on credit.

b.Thirty percent of credit sales are collected in the month of the sale and 70% in the following month.

c.The ending finished goods inventory equals 30% of the following month’s unit sales.d.The ending raw materials inventory equals 20% of the following month’s raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.50 per pound.

e.Thirty percent of raw materials purchases are paid for in the month of purchase and 70% in the following month.

f.The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor-hours.

g.The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $65,000.

1) What is the estimated cost of raw materials purchases for July?

2) What is the estimated raw materials inventory balance (in dollars) at the end of July?

3) What is the estimated accounts payable balance at the end of July?

4) What is the estimated finished goods inventory balance at the end of July, if the company always uses an estimated predetermined plantwide overhead rate of $7 per direct labor-hour?

 5) What is the estimated cost of goods sold and gross margin for July, if the company always uses an estimated predetermined plantwide overhead rate of $7 per direct labor-hour?

6) What is the estimated total selling and administrative expense for July?

7) What is the estimated net operating income for July, if the company always uses an estimated predetermined plantwide overhead rate of $7 per direct labor-hour?