Charterhouse Services Purchased a Van on January 1,2012,for $56,000

question 32

Multiple Choice

Charterhouse Services purchased a van on January 1,2012,for $56,000.It has an estimated life of 5 years,and an estimated salvage value of $6,000.Charterhouse uses straight-line depreciation.At the end of 2013,Charterhouse revised the estimated life of the asset from 5 years to 6 years.How much was the depreciation expense in the year 2014?

• A) $12,000
• B) $6,000
• C) $9,000
• D) $7,500

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Definitions:

Technically Efficient

A condition where a firm or economy utilizes the least amount of input resources to produce a given level of output.

Lowest Cost

Refers to the scenario where a good or service is produced and delivered at the minimum possible expense.

Inputs Available

The resources, such as labor, capital, and materials, that are accessible for production processes.

Production Coordination

The management and alignment of various production activities and processes to ensure efficient output of goods or services.