The Following Income Statement Was Produced When Volume of Sales

question 95

Multiple Choice

The following income statement was produced when volume of sales was at 400 units. If volume reaches 500 units, net income will be:

• A) $625
• B) $1,800
• C) $700
• D) None of the above

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Definitions:

Sum-Of-The-Years'-Digits Depreciation

A method of depreciation that results in a more accelerated write-off of the asset than the straight-line method, basing the expense on a fraction that decreases year by year.

Useful Life

The estimated duration an asset is expected to be economically viable or productive.

Composite Depreciation Method

A method used to depreciate a group of assets that have different lives and uses as one single asset, applying a uniform depreciation rate.