Base-Forward Owns a Machine That It Purchased on Jan 1

question 15

Multiple Choice

Base-Forward owns a machine that it purchased on Jan 1, 2019 for $600,000. The machine had an estimated useful life of 5 years and an estimated residual value of $100,000. The company uses the declining balance method with a rate of 20%. The machine was sold on December 31, 2021 for $140,000. What was the depreciation expense for 2021?

• A)$292,800
• B)$76,800
• C)$60,000
• D)$50,000

---

Definitions:

Indirect Labor

Workers who provide support to the production process but are not directly involved in creating the product.

Resource Consumption

The amount of resources (such as raw materials, energy, or labor) used by an organization in its operational processes.

Activity-Based Costing

A costing method that identifies activities in an organization and assigns the cost of each activity resource to all products and services according to the actual consumption.

Activity Cost Pools

A grouping of all costs related to a particular business activity, used in activity-based costing to allocate costs more accurately.