Tomko Company Purchased Machinery with a List Price of $96000

question 257

Multiple Choice

Tomko Company purchased machinery with a list price of $96000. They were given a 10% discount by the manufacturer. They paid $600 for shipping and sales tax of $4500. Tomko estimates that the machinery will have a useful life of 10 years and a residual value of $30000. If Tomko uses straight-line depreciation annual depreciation will be

• A) $6150.
• B) $6108.
• C) $9150.
• D) $5640.

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Definitions:

Advertising Expenditure

The amount of money spent on promoting products or services through various media and marketing channels.

Marginal Cost of Production

The cost of producing an additional unit of a good, taking into account both variable and fixed costs.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with elasticity greater than 1 indicating a high responsiveness.

Marginal Cost

The increase in cost resulting from the production of one additional unit of output.