The Cost of an Asset with a Useful Life Exceeding

question 72

Multiple Choice

The cost of an asset with a useful life exceeding one year can be

• A)Expensed immediately
• B)Capitalized until disposal
• C)Capitalized with part of the costs deducted annually
• D)All of the above are possible depending on the asset

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Definitions:

Average Product

The total output produced per unit of a resource employed.

Marginal Product

The extra production resulting from the use of one additional unit of a specific input while holding other inputs steady.

Total Cost

The sum of all costs associated with the production or provision of a good or service, including fixed and variable costs.

Variable Cost

Expenses that vary in relation to the amount of production or operations.