If an Asset Is Fully Depreciated and Retired

question 14

Multiple Choice

If an asset is fully depreciated and retired

• A)a gain on disposal will be recorded.
• B)depreciation must continue to be taken as though the asset were still on the books.
• C)a loss on disposal will be recorded.
• D)no gain or loss on disposal will be recorded.

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Definitions:

Marginal Cost Curve

The marginal cost curve graphically represents the cost incurred in producing one additional unit of a good.

Average Fixed Cost

Represents the fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced.

Total Cost Curve

A graphical representation showing the total cost incurred by a firm at different levels of output.

Variable Input

An input in the production process that can be adjusted in the short term to change the level of output.