On July 15,2013,H

question 6

Essay

On July 15,2013,H.P.purchases a personal computer for his home.The computer cost $3,000.H.P.uses the computer 55 percent of the time in his business,20 percent of the time for managing his investments and the remaining 25 percent of the time for various personal uses.Calculate H.P.'s maximum depreciation deduction for 2013 for the computer,assuming he does not make the election to expense or take bonus depreciation.

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Definitions:

Standard Cost

A predetermined cost of manufacturing a single unit or a number of product units during a specific period under current or anticipated conditions.

Standard Hours

The set number of hours that is expected to be used to complete a certain task or job in a manufacturing or project setting.

Actual Hours

The real number of hours worked or spent on a specific task or project, as opposed to planned or estimated hours.

Direct Labour Rate Variance

The difference between the actual wages paid to workers and the standard cost of those wages for the actual hours worked.