Jack and Reba Purchased Some Furniture on a Conditional Sale

question 12

Multiple Choice

Jack and Reba purchased some furniture on a conditional sale contract.This couple carries no insurance on their household goods.The furniture is stolen one Sunday afternoon.Who will most likely take the loss?

• A)the thieves,since this is a liability claim and they are to blame
• B)the merchant,since they still hold title and have insurance covering their insurable interests
• C)the state,since this is a criminal case
• D)the bailee,since this is a bailment for value on the sale of goods
• E)this couple,because the conditional sale contract gives them strict liability

---

Definitions:

Variable Cost

Costs that vary directly with the level of production or output, such as raw materials and direct labor.

Fixed Cost

Costs that remain constant in total regardless of changes in the level of activity within a relevant range, such as rent, salaries, and insurance premiums.

Variable Cost

Costs that vary directly with the level of production or service activity.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.