Obsolescence

question 78

Multiple Choice

Obsolescence

• A)Occurs when an asset is at the end of its useful life
• B)Refers to a condition where a property,plant and equipment asset is no longer useful in producing goods and services
• C)Refers to a condition where the capacity of a property,plant and equipment asset is too small to meet the company's productive demands
• D)Is the same as inadequacy
• E)None of these

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Definitions:

Gross Profit

Sales minus the cost of goods sold.

Volume Variance

A measure used in budgeting and accounting to illustrate the difference between expected sales volume and actual sales volume.

Standard Costs

Predetermined costs for manufacturing a product or delivering a service, used as targets or benchmarks.

Variances

The differences between planned, budgeted, or standard costs and actual costs.