The Depreciation Method in Which the Depreciable Cost of an Asset

question 82

Multiple Choice

The depreciation method in which the depreciable cost of an asset is apportioned equally over its estimated life in terms of months or years is called the

• A) declining-balance method.
• B) sum-of-the-years'-digit method.
• C) units-of-production method.
• D) straight-line method.

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Definitions:

Short-Run

A period during which at least one input, typically capital, is fixed, influencing the flexibility of businesses to adjust to market changes.

Marginal-Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good varies as the quantity of production changes.

Additive Manufacturing

A method that involves building items by depositing material in successive layers, widely referred to as 3D printing.

Fixed Set-Up Costs

Initial costs that do not vary with the level of production or sales, such as equipment purchases or facility leases, needing to be paid before production starts.