On January 1, 2010, Mena Co

question 2

Multiple Choice

On January 1, 2010, Mena Co. purchased a new machine for $2,000,000. The machine has an estimated useful life of 5 years and a salvage value of $200,000. Mena uses the sum-of-the-years'-digits method of depreciation. The amount of depreciation expense for 2012 is

• A) $360,000
• B) $480,000
• C) $533,333
• D) $600,000

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Definitions:

T-Accounts

A visual representation of accounts used in double-entry bookkeeping to record debits on the left side and credits on the right.

Manufacturing Overhead Applied

The allocation of manufacturing overhead costs to the units produced, based on a predetermined rate.

Manufacturing Overhead

Every cost linked to production that isn't categorized as direct material or direct labor expenses.

Direct Labor-Hours

A measurement of the time spent by workers who are directly involved in the manufacturing process.