A Service Contract

question 73

Multiple Choice

A service contract

• A) Is better than an extended warranty.
• B) Is an agreement to cover repair during the implied warranty period.
• C) Is included automatically with the purchase of a vehicle.
• D) Usually does not cover the engine cooling system.
• E) Covers the repair costs of a product.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales in the short term, such as rent, salaries, or insurance premiums.

Unitised

Refers to the conversion of a product or service into quantifiable units, typically for ease of calculation, tracking, or comparison.

Special Decisions

Decisions made in unique or non-recurring situations requiring specific analysis or responses.

Annual Operating Costs

The total expenses associated with the day-to-day functioning of a business or project over one year.