The Amount of Liquidated Damages Included in a Contract That

question 96

Multiple Choice

The amount of liquidated damages included in a contract that would be upheld by a court:

• A)must be reasonable in light of the inconveniences or lack of feasibility of obtaining an adequate remedy.
• B)may be so high as to be punitive to the breaching party.
• C)may be regarded as a penalty.
• D)None of the above.

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Definitions:

Departmental Overhead Rate

The rate used to allocate overhead costs to individual departments based on certain criteria or activities.

Cost Assignment

The process of identifying, aggregating, and assigning costs to cost objects, such as products, services, or departments.

Plantwide Overhead Rate

A single overhead rate calculated by dividing total factory overhead by the total amount of a chosen allocation base, applied uniformly across all production.

Activity-based Costing (ABC)

A costing method that assigns overhead and indirect costs to related products and services based on their usage.