Printed Pencils Cost

question 38

Multiple Choice

Printed pencils cost $.33 1/3 each for an order of 18,000 pencils. On Monday Jim Company placed an order for 18,000 pencils. What is the exact cost of the pencils for Jim Co.? Be sure to use the fractional equivalent in your calculation.

• A) $5,940
• B) $5,994
• C) $5,999.40
• D) $6,000
• E) None of these

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Definitions:

Depletion Expense

The allocation of the cost of natural resources, such as minerals, oil, or timber, over their productive life.

Salvage Value

Salvage value is the estimated residual value of an asset at the end of its useful life, determining how much it can be sold for or disposed of.

Double-Declining-Balance Depreciation

An accelerated depreciation method that doubles the depreciation rate of an asset, causing it to lose value quicker than under traditional linear depreciation methods.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was put into use.