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:

ANOVA Table

A structured representation of the components of variance analysis to determine the effects of different factors on a response variable.

Degrees of Freedom

The total number of individual quantities or values that can be attributed to a statistical distribution.

Data Table

A structured arrangement of data organized in rows and columns, facilitating data analysis and interpretation.

Test Statistic

A value calculated from sample data during a hypothesis test. It is used to determine whether to reject the null hypothesis.