Harry's Lawn Mower Ceased to Work, and in Order to Get

question 128

Multiple Choice

Harry's lawn mower ceased to work, and in order to get the lawn mowed, he borrowed his neighbour's lawnmower. Which one of the following is correct with respect to Harry's responsibility in relation to that lawn mower?

• A) If, when Harry asked his neighbour, the neighbour was reluctant to loan it to Harry but did so anyway, this is an example of an involuntary bailment.
• B) This is a gratuitous bailment, and as such, Harry has no legal obligation to look after the lawnmower.
• C) Because Harry has borrowed the lawnmower, he is obligated to return it in the condition it was given and is liable for any damage or loss no matter what the reason.
• D) Because the lawnmower is valuable, this is an example of a bailment for value.
• E) This is a gratuitous bailment for Harry's benefit, and as such, Harry has a duty to be reasonably careful that no harm or accident come to that lawnmower.

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Definitions:

Factory Overhead Applied

Costs associated with the production process that are not directly tied to a specific product, such as depreciation or utilities, allocated to products based on a systematic approach.

Predetermined Overhead Rate

An estimated rate used to assign manufacturing overhead costs to individual units of production, based on a particular activity (e.g., machine hours, labor hours).

Direct Material Cost

The expense of raw materials and components directly used in the production of a product.

Overhead Rate

A calculation used to allocate overhead costs to produced goods or services, often based on direct labor hours or machine hours.