Euclid College Recently Leased a Photocopy Machine for $1,500 Per

question 86

Multiple Choice

Euclid College recently leased a photocopy machine for $1,500 per month plus $0.04 per copy.Additional variable operating costs were $0.02 per copy.Euclid College estimated it would produce 30,000 copies per month.The Accounting Department estimated it would produce 6,000 copies, but actually produced only 4,000 copies.If Euclid College uses a predetermined rate per copy, then _____ would be allocated to the Accounting Department.

• A)$540
• B)$660
• C)$440
• D)$240

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Definitions:

Dishonor

The refusal or inability to pay a financial obligation when it comes due.

Secondarily Liable

Refers to a party who is indirectly responsible for fulfilling a debt or obligation if the primary party fails to do so.

Secondary Signature Liability

The legal responsibility of a party who signs a document on behalf of another party, potentially being held liable under certain conditions.

Warranty Liability

An obligation that arises from a warranty, where the issuer must repair or replace defective products or parts according to the terms of the warranty.