Paul Hauling Has a Fleet of 10 Large Trucks That

question 47

Multiple Choice

Paul Hauling has a fleet of 10 large trucks that cost a total of $1,410,000.The fleet is expected to provide 1,000,000 miles of transportation during an estimated 10-year life,and be sold for 10% of the original cost at the end of that time.If the fleet traveled 125,000 miles in the current twelve-month period,what would be the depreciation expense under the straight-line (SL) and units-of-production (U-of-P) methods?

• A)SL = $158,625 and U-of-P = $141,000.
• B)SL = $141,000 and U-of-P = $158,625.
• C)SL = $126,900 and U-of-P = $176,250.
• D)SL = $126,900 and U-of-P = $158,625.

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Definitions:

Direct Labor-Hours

The total hours worked by employees directly involved in manufacturing goods or providing services.

Standard Costs

Pre-determined costs used as a benchmark for evaluating actual production costs within a business.

Raw Material

Basic, unprocessed materials used in the manufacturing process to produce finished goods.

Work in Process

An inventory account that tracks the cost of products that are in production but not yet completed.