Morgan,an Agent,was Instructed to Sell Drew's Property at a Specified

question 42

Multiple Choice

Morgan,an agent,was instructed to sell Drew's property at a specified "firm" price of $450,000.A month later,the value of the property decreased substantially to $75,000 because of zoning changes.What is the status of the agency relationship?

• A)Most likely,the agency is terminated because of impossibility.
• B)It would terminate unless Drew had given Morgan a durable power of attorney.
• C)It becomes an agency coupled with an interest,and continues unaffected by any change what so ever.
• D)It requires the agent to compensate the principal with less compensation.

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Definitions:

Job-Order Costing

An accounting practice that tracks the costs associated with a specific job or batch of goods, capturing direct labor, materials, and overhead.

Predetermined Overhead Rate

A rate calculated at the start of an accounting period to allocate overhead costs to products or services produced.

Machine-Hours

The total time that machinery is operating and engaged in production activities during a specified period.

Job T687

A specific job or project identifier used within a job costing system to track costs and progress.