Felipe Agrees to Work as Gary's Personal Accountant for One

question 58

Multiple Choice

Felipe agrees to work as Gary's personal accountant for one year but dies in the sixth month of the contract.Felipe's estate

• A)is discharged from any contractual liability.
• B)must find a competent accountant to fulfill the contract.
• C)must pay liquidated damages.
• D)must refund any money paid to Felipe on the contract.

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Definitions:

Fixed Costs

Outgoings such as rent, salaries, and premiums for insurance that are unaffected by the quantity of sales or production.

Special Orders

Custom orders that typically differ from standard products and may have unique pricing or production requirements.

Variable Costs

Expenses that fluctuate in direct proportion to production or sales figures, like direct labor and raw materials.

Variable Costing

A costing method that only includes variable production costs in the cost of goods sold and treats fixed overhead as a period expense.