Computer Boutique sells computer equipment and home office furniture. Currently, the furniture product line takes up approximately 50% of the company's retail floor space. The president of Computer Boutique is trying to decide whether the company should continue offering furniture or just concentrate on computer equipment. If furniture is dropped, salaries and other direct fixed costs can be avoided. In addition, sales of computer equipment can increase by 13%. Allocated fixed costs are assigned based on relative sales.
Computer Home
Office Equipment Furniture Total
Sales $1,200,000 $800,000 $2,000,000
Less cost of goods sold 700,000 500,000 1,200,000
Contribution margin 500,000 300,000 800,000
Less direct fixed costs:
Salaries 175,000 175,000 350,000
Other 60,000 60,000 120,000
Less allocated fixed costs:
Rent 14,118 9,882 24,000
Insurance 3,529 2,471 6,000
Cleaning 4,117 2,883 7,000
President's salary 76,470 53,350 130,000
Other 7,058 4,942 12,000
Total costs 340,292 380,708 649,000
Net Income $159,708 ($ 8,708) $151,000
Prepare an incremental analysis to determine the incremental effect on profit of discontinuing the furniture line.
Click here for the solution: Computer Boutique sells computer equipment and home office furniture
Showing posts with label home. Show all posts
Showing posts with label home. Show all posts
Friday, April 15, 2016
Monday, October 5, 2015
SY Telc has recently started the manufacture of RecRobo, a three-wheeled robot that can scan a home for fires and gas leaks
ACC 560 Week 5 Assignment
E7-6 SY Telc has recently started the manufacture of RecRobo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a mobile phone. The cost structure to manufacture 20,000 RecRobo’s is as follows.
Cost
Direct materials ($40 per robot) $800,000
Direct labor ($30 per robot) 600,000
Variable overhead ($6 per robot) 120,000
Direct labor ($30 per robot) 600,000
Variable overhead($6 per robot) 120,000
Allocated fixed overhead($25 per robot) 500,000
Total $2,020,000
SY Telc is approached by Chen Inc. which offers to make RecRobo for $90 per unit or $1,800,000.
Instructions
(a) Using incremental analysis, determine whether SY Telc should accept this offer under each of the following independent assumptions.
(1) Assume that $300,000 of the fixed overhead cost can be reduced (avoided).
(2) Assume that none of the fixed overhead can be reduced (avoided). However, if the robots are purchased from Chen Inc., SY Telc can use the released productive resources to generate additional income of $300,000.
(b) Describe the qualitative factors that might affect the decision to purchase the robots from an outside supplier.
Click here for the solution: SY Telc has recently started the manufacture of RecRobo, a three-wheeled robot that can scan a home for fires and gas leaks
E7-6 SY Telc has recently started the manufacture of RecRobo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a mobile phone. The cost structure to manufacture 20,000 RecRobo’s is as follows.
Cost
Direct materials ($40 per robot) $800,000
Direct labor ($30 per robot) 600,000
Variable overhead ($6 per robot) 120,000
Direct labor ($30 per robot) 600,000
Variable overhead($6 per robot) 120,000
Allocated fixed overhead($25 per robot) 500,000
Total $2,020,000
SY Telc is approached by Chen Inc. which offers to make RecRobo for $90 per unit or $1,800,000.
Instructions
(a) Using incremental analysis, determine whether SY Telc should accept this offer under each of the following independent assumptions.
(1) Assume that $300,000 of the fixed overhead cost can be reduced (avoided).
(2) Assume that none of the fixed overhead can be reduced (avoided). However, if the robots are purchased from Chen Inc., SY Telc can use the released productive resources to generate additional income of $300,000.
(b) Describe the qualitative factors that might affect the decision to purchase the robots from an outside supplier.
Click here for the solution: SY Telc has recently started the manufacture of RecRobo, a three-wheeled robot that can scan a home for fires and gas leaks
Friday, September 25, 2015
Pronto Plumbing Company is a newly formed company specializing in plumbing services for home and business
ACC 560 Week 6 Assignment
E10-9 Pronto Plumbing Company is a newly formed company specializing in plumbing services for home and business. The owner, Paul Pronto, had divided the company into two segments: Home Plumbing Services and Business Plumbing Services. Each segment is run by its own supervisor, while basic selling and administrative services are shared by both segments.
Paul has asked you to help him create a performance reporting system that will allow him to measure each segment's performance in terms of its profitability. To that end, the following information has been collected on the Home Plumbing Services segment for the first quarter of 2008.
Budgeted Actual
Service revenue $25,000 $26,000
Allocated portion of:
Building depreciation 11,000 11,000
Advertising 5,000 4,200
Billing 3,500 3,000
Property taxes 1,200 1,000
Material and supplies 1,500 1,200
Supervisory salaries 9,000 9,400
Insurance 4,000 3,500
Wages 3,000 3,300
Gas and oil 2,700 3,400
Equipment depreciation 1,600 1,300
Instructions
a) Prepare a responsibility report for the first quarter of 2008 for the Home Plumbing Services segment.
b) Write a memo to Paul Pronto discussing the principles that should be used when preparing performance reports.
Click here for the solution: Pronto Plumbing Company is a newly formed company specializing in plumbing services for home and business
E10-9 Pronto Plumbing Company is a newly formed company specializing in plumbing services for home and business. The owner, Paul Pronto, had divided the company into two segments: Home Plumbing Services and Business Plumbing Services. Each segment is run by its own supervisor, while basic selling and administrative services are shared by both segments.
Paul has asked you to help him create a performance reporting system that will allow him to measure each segment's performance in terms of its profitability. To that end, the following information has been collected on the Home Plumbing Services segment for the first quarter of 2008.
Budgeted Actual
Service revenue $25,000 $26,000
Allocated portion of:
Building depreciation 11,000 11,000
Advertising 5,000 4,200
Billing 3,500 3,000
Property taxes 1,200 1,000
Material and supplies 1,500 1,200
Supervisory salaries 9,000 9,400
Insurance 4,000 3,500
Wages 3,000 3,300
Gas and oil 2,700 3,400
Equipment depreciation 1,600 1,300
Instructions
a) Prepare a responsibility report for the first quarter of 2008 for the Home Plumbing Services segment.
b) Write a memo to Paul Pronto discussing the principles that should be used when preparing performance reports.
Click here for the solution: Pronto Plumbing Company is a newly formed company specializing in plumbing services for home and business
For the past several years, Emily Page has operated a part-time consulting business from her home
PR 4-6A For the past several years, Emily Page has operated a part-time consulting business from her home. As of June 1, 2010, Emily decided to move to rented quarters and to operate the business, which was to be known as Bottom Line Consulting, on a full-time basis. Bottom Line Consulting entered into the following transactions during June:
June 1: The following assets were received from Emily Page: cash, $20,000; accounts receivable, $4,500, supplies, $2,000; and office equipment, $11,500. There were no liabilities received.
1. Paid three months rent on a lease rental contract, $6,000.
2. Paid the premiums on property casualty insurance policies, $2,400.
AND SO ON
Check: 8. Net Income $16,455
Click here for the solution: For the past several years, Emily Page has operated a part-time consulting business from her home
June 1: The following assets were received from Emily Page: cash, $20,000; accounts receivable, $4,500, supplies, $2,000; and office equipment, $11,500. There were no liabilities received.
1. Paid three months rent on a lease rental contract, $6,000.
2. Paid the premiums on property casualty insurance policies, $2,400.
AND SO ON
Check: 8. Net Income $16,455
Click here for the solution: For the past several years, Emily Page has operated a part-time consulting business from her home
Wednesday, September 23, 2015
Crest Industries sells a single model of satellite radio receivers for use in the home
Exercise 3-33 CVP with Income Taxes
Crest Industries sells a single model of satellite radio receivers for use in the home. The radios have the following price and cost characteristics:
Sales Price …………………………….. $ 80 per radio
Variable costs ………………………. $32 per radio
Fixed costs ……………………………... $360.00 per month
Crest is subject to an income tax rate of 40 percent.
Required
How many receivers must Crest sell earn a monthly operating profit of $90,000 after taxes?
Click here for the solution: Crest Industries sells a single model of satellite radio receivers for use in the home
Crest Industries sells a single model of satellite radio receivers for use in the home. The radios have the following price and cost characteristics:
Sales Price …………………………….. $ 80 per radio
Variable costs ………………………. $32 per radio
Fixed costs ……………………………... $360.00 per month
Crest is subject to an income tax rate of 40 percent.
Required
How many receivers must Crest sell earn a monthly operating profit of $90,000 after taxes?
Click here for the solution: Crest Industries sells a single model of satellite radio receivers for use in the home
Tuesday, September 8, 2015
For the past several years, Sara Keith has operated a part-time consulting business from her home
ACC 1800 – Accounting Procedures
Fall 2011 - Comprehensive Problem
For the past several years, Sara Keith has operated a part-time consulting business from her home. As of June 1, 2011, Sara decided to move to rented quarters and to operate the business, which was to be known as S&K Consulting, on a full-time basis. S&K Consulting entered into the following transactions during June:
June 1 The following assets were received from Sara Keith: cash, $20,000; accounts receivable, $4,500; supplies, $2,000; and office equipment, $11,500. There were no liabilities received.
June 1 Paid three month’s rent on a lease contract, $6,000.
June 2 Paid the annual premiums on property and casualty insurance policies, $2,400.
June 4 Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $2,700.
June 5 Purchased additional office equipment on account, $3,500.
June 6 Received cash from clients on account, $3,000.
June 10 Paid cash for a newspaper advertisement, $200.
June 12 Paid for part of the debt incurred on June 5, $750.
June 12 Recorded services provided on account for the period June 1-12, $5,100.
June 14 Paid part-time receptionist for two weeks’ salary, $1,100.
June 17 Recorded cash from clients for fees earned for the period June 1-16, $6,500.
June 18 Paid cash for supplies, $750.
June 20 Recorded services provided on account for the period June 13-20, $3,100.
June 24 Recorded cash from cash clients for fees earned for the period June 17-24, $5,150.
June 26 Received cash from clients on account, $6,900.
June 27 Paid part-time receptionist for two weeks’ salary, $1,100.
June 29 Paid telephone bill for June, $150.
June 29 Paid electricity bill for June, $400.
June 30 Recorded cash from cash clients for fees earned for the period June 25-30, $2,500.
June 30 Recorded services provided on account for the remainder of June, $1,100.
June 30 Sara withdrew $5,000 for personal use.
Instructions:
1. Journalize each transaction in a two-column journal, referring to the following chart of accounts in selecting the accounts to be debited and credited.
11 Cash 31 Sara Keith, Capital
12 Accounts Receivable 32 Sara Keith, Withdrawals
14 Supplies 41 Service Revenue
15 Prepaid Rent 51 Salary Expense
16 Prepaid Insurance 52 Rent Expense
18 Office Equipment 53 Supplies Expense
19 Accumulated Depreciation 54 Depreciation Expense
21 Accounts Payable 55 Insurance Expense
22 Salaries Payable 59 Miscellaneous Expense
23 Unearned Service Revenue
2. Open T-accounts and post the journal entries to the T-accounts.
3. Complete a worksheet at end of June using the following adjustment data:
a. Insurance expired during June is $200.
b. Supplies on hand on June 30 are $650.
c. Depreciation of office equipment for June is $250.
d. Accrued receptionist salary on June 30 is $220.
e. Rent expired during June is $2,000.
f. Unearned service revenue on June 30 is $1,875.
4. Prepare an income statement, a statement of owner’s equity and a balance sheet.
5. Journalize and post the adjusting entries.
6. Journalize and post the closing entries.
7. Compute final balances in each T-account.
8. Prepare the post-closing trial balance.
Click here for the solution: For the past several years, Sara Keith has operated a part-time consulting business from her home
Fall 2011 - Comprehensive Problem
For the past several years, Sara Keith has operated a part-time consulting business from her home. As of June 1, 2011, Sara decided to move to rented quarters and to operate the business, which was to be known as S&K Consulting, on a full-time basis. S&K Consulting entered into the following transactions during June:
June 1 The following assets were received from Sara Keith: cash, $20,000; accounts receivable, $4,500; supplies, $2,000; and office equipment, $11,500. There were no liabilities received.
June 1 Paid three month’s rent on a lease contract, $6,000.
June 2 Paid the annual premiums on property and casualty insurance policies, $2,400.
June 4 Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $2,700.
June 5 Purchased additional office equipment on account, $3,500.
June 6 Received cash from clients on account, $3,000.
June 10 Paid cash for a newspaper advertisement, $200.
June 12 Paid for part of the debt incurred on June 5, $750.
June 12 Recorded services provided on account for the period June 1-12, $5,100.
June 14 Paid part-time receptionist for two weeks’ salary, $1,100.
June 17 Recorded cash from clients for fees earned for the period June 1-16, $6,500.
June 18 Paid cash for supplies, $750.
June 20 Recorded services provided on account for the period June 13-20, $3,100.
June 24 Recorded cash from cash clients for fees earned for the period June 17-24, $5,150.
June 26 Received cash from clients on account, $6,900.
June 27 Paid part-time receptionist for two weeks’ salary, $1,100.
June 29 Paid telephone bill for June, $150.
June 29 Paid electricity bill for June, $400.
June 30 Recorded cash from cash clients for fees earned for the period June 25-30, $2,500.
June 30 Recorded services provided on account for the remainder of June, $1,100.
June 30 Sara withdrew $5,000 for personal use.
Instructions:
1. Journalize each transaction in a two-column journal, referring to the following chart of accounts in selecting the accounts to be debited and credited.
11 Cash 31 Sara Keith, Capital
12 Accounts Receivable 32 Sara Keith, Withdrawals
14 Supplies 41 Service Revenue
15 Prepaid Rent 51 Salary Expense
16 Prepaid Insurance 52 Rent Expense
18 Office Equipment 53 Supplies Expense
19 Accumulated Depreciation 54 Depreciation Expense
21 Accounts Payable 55 Insurance Expense
22 Salaries Payable 59 Miscellaneous Expense
23 Unearned Service Revenue
2. Open T-accounts and post the journal entries to the T-accounts.
3. Complete a worksheet at end of June using the following adjustment data:
a. Insurance expired during June is $200.
b. Supplies on hand on June 30 are $650.
c. Depreciation of office equipment for June is $250.
d. Accrued receptionist salary on June 30 is $220.
e. Rent expired during June is $2,000.
f. Unearned service revenue on June 30 is $1,875.
4. Prepare an income statement, a statement of owner’s equity and a balance sheet.
5. Journalize and post the adjusting entries.
6. Journalize and post the closing entries.
7. Compute final balances in each T-account.
8. Prepare the post-closing trial balance.
Click here for the solution: For the past several years, Sara Keith has operated a part-time consulting business from her home
Friday, August 21, 2015
In a working paper for combined financial statements of home office and branch, the branch's net income is included in
MULTIPLE CHOICE
1. In a working paper for combined financial statements of home office and branch, the branch's net income is included in: (Points : 1)
2. If both the home office and the branch of a business enterprise use the perpetual inventory system, a Shipments to Branch ledger account appears in the accounting records of: (Points : 1)
3. The following journal entry (explanation omitted) appeared in the accounting records of Marty Corporation's only branch:
Operating Expenses 600,000
Home Office 600,000
The journal entry indicates that: (Points : 1)
4. Direct out-of-pocket costs of a business combination that are part of the cost of the combinee do not include: (Points : 1)
5. The Income: Branch ledger account is maintained in the accounting records of: (Points : 1)
6. In a business combination, the appropriate accounting for an excess of current fair values the combinee's identifiable net assets over the combinor's cost is to: (Points : 1)
7. The Shipments to Branch ledger account in the accounting records of the home office of a business enterprise: (Points : 1)
8. The business enterprises that enter into a business combination are termed the: (Points : 1)
9. If at the end of an accounting period the balance of the Investment in Branch ledger account in the accounting records of the home office is $20,000 and the balance of the Home Office account in the accounting records of the branch (after the branch recorded closing entries) is $25,500, the most likely explanation for the discrepancy of $5,500 is a: (Points : 1)
10. The Home Office ledger account in the accounting records of a branch is best described as: (Points : 1)
Click here for the solution: In a working paper for combined financial statements of home office and branch, the branch's net income is included in
1. In a working paper for combined financial statements of home office and branch, the branch's net income is included in: (Points : 1)
2. If both the home office and the branch of a business enterprise use the perpetual inventory system, a Shipments to Branch ledger account appears in the accounting records of: (Points : 1)
3. The following journal entry (explanation omitted) appeared in the accounting records of Marty Corporation's only branch:
Operating Expenses 600,000
Home Office 600,000
The journal entry indicates that: (Points : 1)
4. Direct out-of-pocket costs of a business combination that are part of the cost of the combinee do not include: (Points : 1)
5. The Income: Branch ledger account is maintained in the accounting records of: (Points : 1)
6. In a business combination, the appropriate accounting for an excess of current fair values the combinee's identifiable net assets over the combinor's cost is to: (Points : 1)
7. The Shipments to Branch ledger account in the accounting records of the home office of a business enterprise: (Points : 1)
8. The business enterprises that enter into a business combination are termed the: (Points : 1)
9. If at the end of an accounting period the balance of the Investment in Branch ledger account in the accounting records of the home office is $20,000 and the balance of the Home Office account in the accounting records of the branch (after the branch recorded closing entries) is $25,500, the most likely explanation for the discrepancy of $5,500 is a: (Points : 1)
10. The Home Office ledger account in the accounting records of a branch is best described as: (Points : 1)
Click here for the solution: In a working paper for combined financial statements of home office and branch, the branch's net income is included in
Monday, August 17, 2015
WoodGrain Technology makes home office furniture from fine hardwoods
WoodGrain Technology makes home office furniture from fine hardwoods. The company uses a job-order costing system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Preparation Department is based on machine-hours, and the rate in the Fabrication Department is based on direct materials cost. At the beginning of the year, the company’s management made the following estimates for the year:
Department
Preparation Fabrication
Machine-hours . . . . . . . . . . . . . . . . . 80,000 21,000
Direct labour-hours. . . . . . . . . . . . . . 35,000 65,000
Direct materials cost. . . . . . . . . . . . . $190,000 $400,000
Direct labour cost . . . . . . . . . . . . . . . 280,000 530,000
Manufacturing overhead cost . . . . . . 416,000 720,000
Job 127 was started on April 1 and completed on May 12. The company’s cost records show the following information on the job:
Department
Preparation Fabrication
Machine-hours . . . . . . . . . . . . . . . . . 350 70
Direct labour-hours. . . . . . . . . . . . . . 80 130
Direct materials cost. . . . . . . . . . . . . $940 $1,200
Direct labour cost . . . . . . . . . . . . . . . 710 980
Required:
1. Compute the predetermined overhead rate used during the year in the Preparation Department. Compute the rate used in the Fabrication Department.
2. Compute the total overhead cost applied to job 127.
3. What would be the total cost recorded for job 127? If the job contained 25 units, what would be the unit product cost?
4. At the end of the year, the records of WoodGrain Technology revealed the following actual cost and operating data for all jobs worked on during the year:
Department
Preparation Fabrication
Machine-hours . . . . . . . . . . . . . . . . . 73,000 24,000
Direct labour-hours. . . . . . . . . . . . . . 30,000 68,000
Direct materials cost. . . . . . . . . . . . . $165,000 $420,000
Manufacturing overhead cost . . . . . . 390,000 740,000
What was the amount of underapplied or overapplied overhead in each department at the end of the year?
Click here for the solution: WoodGrain Technology makes home office furniture from fine hardwoods
Department
Preparation Fabrication
Machine-hours . . . . . . . . . . . . . . . . . 80,000 21,000
Direct labour-hours. . . . . . . . . . . . . . 35,000 65,000
Direct materials cost. . . . . . . . . . . . . $190,000 $400,000
Direct labour cost . . . . . . . . . . . . . . . 280,000 530,000
Manufacturing overhead cost . . . . . . 416,000 720,000
Job 127 was started on April 1 and completed on May 12. The company’s cost records show the following information on the job:
Department
Preparation Fabrication
Machine-hours . . . . . . . . . . . . . . . . . 350 70
Direct labour-hours. . . . . . . . . . . . . . 80 130
Direct materials cost. . . . . . . . . . . . . $940 $1,200
Direct labour cost . . . . . . . . . . . . . . . 710 980
Required:
1. Compute the predetermined overhead rate used during the year in the Preparation Department. Compute the rate used in the Fabrication Department.
2. Compute the total overhead cost applied to job 127.
3. What would be the total cost recorded for job 127? If the job contained 25 units, what would be the unit product cost?
4. At the end of the year, the records of WoodGrain Technology revealed the following actual cost and operating data for all jobs worked on during the year:
Department
Preparation Fabrication
Machine-hours . . . . . . . . . . . . . . . . . 73,000 24,000
Direct labour-hours. . . . . . . . . . . . . . 30,000 68,000
Direct materials cost. . . . . . . . . . . . . $165,000 $420,000
Manufacturing overhead cost . . . . . . 390,000 740,000
What was the amount of underapplied or overapplied overhead in each department at the end of the year?
Click here for the solution: WoodGrain Technology makes home office furniture from fine hardwoods
Saturday, August 15, 2015
Elliot’s Escargots sells commercial and home snail extraction tools and serving pieces
Elliot’s Escargots sells commercial and home snail extraction tools and serving pieces. Currently, the snail extraction line of products takes up approximately 50 percent of the company’s retail floor space. The CEO of Elliot’s wants to decide if the company should continue offering snail extraction tools or focus only on serving pieces. If the snail extraction tools are dropped, salaries and other direct fixed costs can be avoided and serving piece sales would increase by 13 percent. Allocated fixed costs are assigned based on relative sales.
Snail Extraction Serving
Tools Pieces Total
Sales $1,200,000 $800,000 $2,000,000
Less cost of goods sold 700,000 500,000 1,200,000
Contribution margin 500,000 300,000 800,000
Less direct fixed costs:
Salaries 175,000 175,000 350,000
Other 60,000 60,000 120,000
Less allocated fixed costs:
Rent 14,118 9,882 24,000
Insurance 3,529 2,471 6,000
Cleaning 4,117 2,883 7,000
Executive salary 76,470 53,530 130,000
Other 7,058 4,942 12,000
Total costs 340,292 308,708 649,000
Net income $159,708 ($ 8,708) $151,000
Prepare an incremental analysis in good form to determine the incremental effect on profit of discontinuing the snail extraction tool line.
Click here for the solution: Elliot’s Escargots sells commercial and home snail extraction tools and serving pieces
Snail Extraction Serving
Tools Pieces Total
Sales $1,200,000 $800,000 $2,000,000
Less cost of goods sold 700,000 500,000 1,200,000
Contribution margin 500,000 300,000 800,000
Less direct fixed costs:
Salaries 175,000 175,000 350,000
Other 60,000 60,000 120,000
Less allocated fixed costs:
Rent 14,118 9,882 24,000
Insurance 3,529 2,471 6,000
Cleaning 4,117 2,883 7,000
Executive salary 76,470 53,530 130,000
Other 7,058 4,942 12,000
Total costs 340,292 308,708 649,000
Net income $159,708 ($ 8,708) $151,000
Prepare an incremental analysis in good form to determine the incremental effect on profit of discontinuing the snail extraction tool line.
Click here for the solution: Elliot’s Escargots sells commercial and home snail extraction tools and serving pieces
Friday, July 31, 2015
H. Banks Company would like to design, produce, and sell versatile toasters for the home kitchen market
Exercise 13-35 Target Costing
H. Banks Company would like to design, produce, and sell versatile toasters for the home kitchen market. The toaster will have four slots that adjust in thickness to accommodate both slim slices of bread and oversized bagels. The target price is $75. Banks requires that new products be priced such that 20 percent of the price is profit.
Instructions
1. Calculate the amount of desired profit per unit of the new toaster.
2. Calculate the target cost per unit of the new toaster.
Click here for the solution: H. Banks Company would like to design, produce, and sell versatile toasters for the home kitchen market
H. Banks Company would like to design, produce, and sell versatile toasters for the home kitchen market. The toaster will have four slots that adjust in thickness to accommodate both slim slices of bread and oversized bagels. The target price is $75. Banks requires that new products be priced such that 20 percent of the price is profit.
Instructions
1. Calculate the amount of desired profit per unit of the new toaster.
2. Calculate the target cost per unit of the new toaster.
Click here for the solution: H. Banks Company would like to design, produce, and sell versatile toasters for the home kitchen market
Sunday, July 26, 2015
Stephen Gall and his family became ill after drinking contaminated water supplied to their home by the McKeesport Municipal Water Authority
Stephen Gall and his family became ill after drinking contaminated water supplied to their home by the McKeesport Municipal Water Authority. They filed suit against the utility, arguing, among other things, that the utility had breached the UCC implied warranty of merchantability when it sold them contaminated water. The utility moved to dismiss their complaint, arguing that since water was not “goods,” the UCC did not apply. Should the Galls’ complaint be dismissed?
Click here for the solution: Stephen Gall and his family became ill after drinking contaminated water supplied to their home by the McKeesport Municipal Water Authority
Click here for the solution: Stephen Gall and his family became ill after drinking contaminated water supplied to their home by the McKeesport Municipal Water Authority
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