Jim and Kelly Agree That Jim Will Fix the Refrigeration

question 38

Multiple Choice

Jim and Kelly agree that Jim will fix the refrigeration unit in Kelly's Lunch Café in exchange for her payment of a debt that Jim owes to Money Corporation. Under this contract, the intended beneficiary is

• A) Kelly.
• B) Money.
• C) Jim.
• D) any customer, client, or employee of Lunch or Money.

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Definitions:

Cash Disbursements

Payments made in cash by a business for various purposes, including operating expenses, asset purchases, and debt repayments.

Variable Overhead Rate

The rate at which variable overhead costs are applied to units of production, based on an activity metric such as labor hours.

Fixed Manufacturing Overhead

Costs associated with manufacturing that do not vary with the level of production, such as salaries of managers and rent for the factory.

Cash Disbursements

The outflow of cash for expenses, investments, and other business activities as recorded in the entity's financial records.