Anna Has a Contract to Perform Accounting Services for Interior

question 28

Multiple Choice

Anna has a contract to perform accounting services for Interior Corporation.She breaches her contract in a nonmaterial way.Which of the following is correct with respect to Anna's right to be paid for her work?

• A)Anna is not entitled to any compensation for her services.
• B)Anna will be paid only if her contract does not specify that it is a "satisfaction" contract.
• C)Anna is entitled to the contractually agreed upon fee less any damages or loss her breach has caused her clients.
• D)Anna is entitled to full compensation since the breach is nonmaterial.

---

Definitions:

Inspection Cost

Expenses associated with the activities undertaken to ensure that products or services meet the required standards and specifications.

Mixed Cost

A cost that contains both variable and fixed cost elements, changing in response to changes in production or sales volumes.

Billing Expense

Costs incurred during the billing process, including materials, postage, and labor costs related to preparing and sending out invoices to customers.

Contribution Format

A layout of the income statement that distinguishes between fixed and variable expenses to emphasize the contribution margin.