A Loss Is Recorded on the Sale of a Plant

question 156

Multiple Choice

A loss is recorded on the sale of a plant asset when the:

• A)cash received exceeds the asset's book value.
• B)asset's book value is less than its historical cost.
• C)asset's book value is greater than the amount of cash received from the sale.
• D)cash received exceeds the cash paid for the replacement asset.

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Definitions:

Direct Labor Hours

The sum of working hours of employees directly participating in the production of goods or provision of services.

Production Budget

An estimate of the total number of units that must be produced in a given period to meet both sales and inventory needs.

Production Budget

A production budget is a financial plan that estimates the number of units to be produced to meet anticipated sales demand.

Sales Budget

A detailed projection of a company’s sales revenue for a certain period, often used as a basis for production, purchasing, and staffing plans.