Given the Following List of Methods of Depreciation, Select the Method

question 131

Multiple Choice

Given the following list of methods of depreciation, select the method that is best for the situation or purpose given.Some answers may be used more than once, while others may not be used at all.
-This method is the best for management bonus plans.

• A)Straight-line
• B)Units-of-productionc.
• C)Double-declining-balance
• D)MACRS

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Definitions:

Fixed Expenses

Costs that do not vary with the level of production or sales, such as rent, salaries, or utilities.

Profit

The financial gain achieved when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain those activities.

Margin Of Safety

The extent to which sales can decline before a business reaches its breakeven point.

Variable Expenses

Costs that change in proportion to the level of production or sales activities.