Based on the Following Information, What Is the Net Book

question 1

Multiple Choice

Based on the following information, what is the net book value of the asset on the December 31, 2012 balance sheet?

• A)$185,000
• B)$200,000
• C)$300,000
• D)$350,000

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Definitions:

Machine-Hours

A measure of production output or activity based on the number of hours machines are operated in the manufacturing process.

Predetermined Overhead Rate

A predetermined overhead rate is the rate used to allocate estimated overhead costs to products or services based on a specific cost driver.

Machine-Hours

The total hours that machinery is operated in the production process, used as a basis for allocating manufacturing overhead.

Predetermined Overhead Rate

A rate calculated before a period begins, based on the estimated overhead costs and expected activity levels, used to apply overhead to products or job costs.