Mason, Who Is a Waiter, Is Injured When an Unopened

question 62

Multiple Choice

Mason, who is a waiter, is injured when an unopened bottle of cola explodes in his hand while he is putting it into the restaurant's cooler. If Mason wants to sue the bottling company for his injuries:

• A) he will lose, because it will be impossible for him to prove that the bottle was overpressurized by the bottler.
• B) he will lose, because the bottling company has no duty to him.
• C) he will probably win if the court allows him to use the res ipsa loquitur doctrine.
• D) he will win based on the last clear chance rule.

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Definitions:

Fixed Manufacturing Overhead

Ongoing expenses that do not change in total with the level of production or sales volume, such as salaries, rent, and insurance, associated specifically with the manufacturing process.

Variable Costing

An accounting method that includes only variable costs—those that change with production levels—in the cost of goods sold and inventory valuation.

Unit Product Cost

The total cost associated with producing one unit of a product, including direct materials, direct labor, and allocated overhead.

Segmented Income Statement

An income statement that separates costs and revenues into different segments, departments, or divisions of a business.