Regional Wood Products Company and Sylvia Enter into a Contract

question 71

Multiple Choice

Regional Wood Products Company and Sylvia enter into a contract for a sale of lumber.Regional knows the purpose for which Sylvia will use the goods.Under the UCC,an implied warranty of fitness of a particular purpose arises

• A)if the buyer is relying on the seller to select suitable goods.
• B)if the buyer asks for it.
• C)if the seller is a merchant who deals in goods of the kind sold.
• D)in conjunction with lease contracts,not sales contracts.

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Definitions:

Manufacturing Overhead

All indirect costs associated with manufacturing a product, such as utilities, supplies, and salaries not directly tied to production.

Activity Base

A measure used for allocating costs to a product or service, typically based on the extent to which the product or service uses that activity.

Predetermined Overhead Rate

An estimated rate used to assign overhead costs to products or job orders, based on a particular activity base, before the actual costs are known.

Underapplied Overhead

A condition where the allocated manufacturing overhead is less than the actual overhead costs incurred, leading to a shortfall.