An Asset with a Cost of $45,000 and Accumulated Depreciation

question 75

Multiple Choice

An asset with a cost of $45,000 and accumulated depreciation of $37,500 is sold for $9,500.What is the amount of the gain or loss on disposal?

• A)$2,500 loss
• B)$2,500 gain
• C)$2,000 gain
• D)$2,000 loss

Comprehend the significance of sunk costs and its implications for business decision-making.

Understand the calculation and significance of average costs (average fixed costs, average variable costs, and average total costs).

Apply the concept of marginal costs and its relation to business production decisions.

Recognize how the choice of production techniques impacts cost and efficiency.

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Definitions:

Opportunity Cost

Giving up on possible rewards from various other options by selecting a single alternative.

Absolute Advantage

A condition in which a country, individual, or company can produce a particular good or service at a lower cost in terms of labor and resources than other entities.

Compasses

Navigation instruments used for determining direction relative to the Earth's magnetic poles.

Specialize And Trade

The economic practice where individuals or entities focus on the production of a limited range of goods or services to gain efficiency and then trade with others to meet their needs.