If a Vehicle Was Purchased for $6,500 and Has a Residual

question 43

Multiple Choice

If a vehicle was purchased for $6,500 and has a residual value of $500,the annual depreciation expense will be $1,000 if the estimated useful life is

• A)6 years.
• B)6.5 years.
• C)7 years.
• D)13 years.

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Definitions:

Raw Materials

The basic materials from which products are made, typically unprocessed or minimally processed before being used in manufacturing processes.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs.

Fixed Costs

Expenses that do not change in total regardless of the level of production or sales activity, such as rent, salaries, and insurance.

Marginal Costs

The additional cost incurred by producing one extra unit of a product or service.