Rinky-Dink Inc

question 94

Multiple Choice

Rinky-Dink Inc.incurred research and development costs of $200,000 and legal fees of $100,000 to acquire a patent.The patent has a legal life of 20 years and a useful life of 10 years.What amount should the company record as patent amortization expense in the first year?

• A)$10,000
• B)$15,000
• C)$20,000
• D)$30,000

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (or standard) variable overhead based on activity levels.

Favorable

A term used in accounting and finance to describe outcomes or variances that are better than anticipated, indicating a positive performance against the budget or forecast.

Unfavorable

A term used to describe a variance or outcome that results in a worse financial position than expected or budgeted.

Labor Rate Variance

The difference between the actual labor costs incurred and the expected (or standard) labor costs, often due to paying a higher or lower wage rate than planned.