Pat Purchased a Used Five-Year Class Asset on March 15,2015,for

question 96

Multiple Choice

Pat purchased a used five-year class asset on March 15,2015,for $60,000.He did not elect § 179 expensing.Determine the cost recovery deduction for 2015 for earnings and profits purposes.

• A)$2,000
• B)$3,000
• C)$6,000
• D)$12,000
• E)None of the above

---

Definitions:

Labor Price Variance

The difference between the actual cost of direct labor and the standard cost, typically associated with the rate paid for labor.

Labor Quantity Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard hourly wage rate.

Standard Costing System

A cost accounting system that assigns predetermined costs to products and services, used to plan budgets and assess performance by comparing actual costs against these standards.

Total Price Variance

The difference between the actual cost of a good or service and its expected cost based on standard pricing.