A Patent Should

question 74

Multiple Choice

A patent should

• A) be amortized over a period of 20 years.
• B) not be amortized if it has an indefinite life.
• C) be amortized over its useful life or 20 years whichever is longer.
• D) be amortized over its useful life or 20 years whichever is shorter.

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Definitions:

Departmental Predetermined Overhead Rates

Rates calculated to allocate overhead costs to products or services, based on department-specific activities and cost drivers.

Machine-Hours

An accounting term that indicates the total number of hours a machine is used during a specific period for manufacturing purposes.

Manufacturing Overhead

All indirect costs associated with the production of goods, including utilities, rent for production facilities, and maintenance expenses.

Overhead Applied

The portion of overhead costs allocated to the production of goods, based on a predetermined rate or method.