Mott Company Uses the Units-Of-Activity Method in Computing Depreciation

question 205

Multiple Choice

Mott Company uses the units-of-activity method in computing depreciation.A new plant asset is purchased for $48,000 that will produce an estimated 100,000 units over its useful
Life.The estimated salvage value at the end of its useful life is $4,000.What is the depreciation cost per unit?

• A)$4.40
• B)$4.80
• C)$.44
• D)$.48

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Definitions:

Logistics Department

A division within a company that manages the movement of goods from the manufacturer to the end-user, covering transportation, warehousing, and inventory.

Operating Divisions

Sections or branches within a company that focus on distinct lines of business or market areas, responsible for their own revenues, expenses, and operations.

Variable Costs

Variable costs are expenses that vary directly with the level of production output, such as materials and labor costs.

Fixed Costs

Charges that stay the same no matter the amount of goods produced or sold, such as rent, salaries, and insurance.