Which of the Following Statements About the Modified Accelerated Cost

question 53

Multiple Choice

Which of the following statements about the Modified Accelerated Cost Recovery System (MACRS) is correct?

• A)It is similar to the units-of-production depreciation method.
• B)It is applied using longer asset lives than the estimated useful lives required by GAAP.
• C)It provides a short-term tax benefit because of the higher depreciation expense reported in the early years of an asset's life.
• D)It is acceptable for use when preparing financial statements.

Calculate and analyze direct labor rate variance.

Calculate and understand the direct materials price variance.

Calculate and understand the direct materials quantity variance.

Understand and calculate variable overhead variance.

---

Definitions:

Economic Losses

Financial losses incurred when the costs of producing goods or services exceed the revenue earned from selling them.

Market Supply

The total amount of a specific good or service available for purchase at any given price level in a market, representing the combined supply of all sellers.

Price-Taker Industry

An industry in which individual firms have no control over the price of their product because the product is standardized, leading them to accept the prevailing market price.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the extent to which a firm exceeds the opportunity cost of its resources.