Katrina Entered into a Contract to Purchase a Computer System

question 4

True/False

Katrina entered into a contract to purchase a computer system from Stacey Systems after a call from Stacey System's sales representative who mistakenly informed Katrina that she would receive a 40 percent discount. When Katrina is billed for the full amount, her only recourse is to pay the bill and bring an action against Stacey Systems and the sales representative for the difference.

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Definitions:

Mixed Cost

A cost consisting of both fixed and variable components and changes in response to variations in production or sales levels.

Variable And Fixed Cost

Expenses that include both variable costs, which fluctuate with production or service levels, and fixed costs, which remain constant regardless of activity.

Mixed Cost

A cost consisting of a fixed component and a variable component, changing in total with the level of activity but remaining constant per unit.

Units-Of-Production Depreciation

A method of depreciation that allocates an asset's cost based on its usage, productivity, or units of production, rather than the passage of time.