There Is Neither a Gain or a Loss on the Sale

question 65

Multiple Choice

There is neither a gain or a loss on the sale of a depreciable asset for an amount exactly equal to its .

• A)acquisition cost
• B)tax book value
• C)opportunity cost
• D)historical cost

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Definitions:

Incremental Cost

The additional cost associated with producing one more unit of a product.

Step-Wise Cost

Costs that remain constant for a certain level of activity but jump to a higher amount once a threshold is crossed.

Fixed Cost

Overheads that stay stable no matter the production or sales figures, involving costs like property rent, employee salaries, and insurance policies.

Relevant Range

The span of activity level or volume in which the specific assumptions of cost behavior are considered to be applicable.