Choose the Correct Statement

question 48

Multiple Choice

Choose the correct statement.

• A)Residential real property is depreciated over 39 years.
• B)Nonresidential real property is depreciated over 27.5 years.
• C)Nonresidential real property is depreciated over 39 years.
• D)Depreciation on real property starts at the beginning of the year in which the property is placed in service.

---

Definitions:

Variable Costs

Costs that change in proportion to the level of activity or production volume.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums, remaining constant regardless of activity levels.

Break-Even Point

The juncture where the cumulative expenses equal total income, yielding neither a profit nor a loss.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, indicating how much revenue contributes towards covering fixed costs and generating profit.