Which of the Following Cases Is Not Eligible for Capital

question 8

Multiple Choice

Which of the following cases is not eligible for capital cost allowance in the current year?

• A) A new engine is installed in a semi-trailer that is used to haul produce to the United States.
• B) An employee owns and uses an automobile in the course of her employment duties during the month of December. Her pay for December is not received until January of the following year.
• C) A piece of equipment was purchased during the year on a 5 year financing term.
• D) A building under construction is scheduled for completion in eighteen months. The building will be used as a production facility.

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Definitions:

DL Wage Variance

The difference between the budgeted wage and the actual wage paid to direct labor employees.

DL Efficiency Variance

The difference between the actual hours worked by direct labor to produce goods and the expected (or standard) hours, multiplied by the standard labor rate.

Skilled Engineering Labor

Workforce with specialized technical and engineering skills, vital for designing, implementing, and maintaining complex systems.

Direct Labor Efficiency Variance

A measure that analyses the variance between the actual hours worked and the standard hours set for producing a certain number of units.