Equipment Cost $36,000 and Is Expected to Be Useful for 5

question 16

Multiple Choice

Equipment cost $36,000 and is expected to be useful for 5 years and have no salvage value. Under the straight-line method, monthly depreciation will be:

• A)$12.
• B)$600.
• C)$60.
• D)$720.

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Definitions:

Direct Labor-Hours

The total hours of labor time directly involved in producing goods or providing services, often used as a basis for allocating manufacturing overhead.

Fixed Manufacturing Overhead

Costs related to production that do not change with the level of output, such as rent, salaries of permanent staff, and depreciation of factory equipment.

Job-Order Costing System

An accounting system that assigns costs to specific production batches or jobs, used in environments where products are customized or not identical.

Manufacturing Departments

Divisions within a manufacturing organization, each focusing on a specific aspect of the production process.