Advanced Systems,Inc

question 68

Multiple Choice

Advanced Systems,Inc.purchased a machine 4 years ago at a price of $82,800.At that time,useful life was estimated at 10 years with a $13,500 salvage value,and straight-line depreciation was used.After recording depreciation for the 4th year,Advanced decided that for future years it would revise its original estimates from 10 to 14 years and from $13,500 to $8,500.The depreciation expense to be recorded in year 5 of the machine's life is:

• A)$4,658
• B)$4,968
• C)$5,508
• D)$6,930

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Definitions:

Direct Costs

Direct costs are expenses that can be directly traced to the production of a specific good or service, without any allocation.

Delivery Expenses

Costs associated with the transport of goods from the seller to the buyer, which can include freight, packaging, and handling fees.

Indirect Expenses

Costs that are not directly tied to the production of goods or services, such as administrative salaries, rent, and utilities.

Cost Center

A business unit or department within an organization that does not directly generate revenue but incurs costs, and its performance is evaluated based on cost control.