RET Company Uses the Activity (Units-Of-Production)method to Depreciate Long-Term Assets

question 9

Multiple Choice

RET Company uses the activity (units-of-production) method to depreciate long-term assets.The company owns a truck that cost $24,000.The truck is estimated to have a salvage value of $2,000 and a useful life of 200,000 miles.How much depreciation expense would be reported on the income statement in a year in which the truck is driven 50,000 miles?

• A)$6,500
• B)$6,000
• C)$5,500
• D)$5,000

---

Definitions:

Zero Variance

A statistical condition in which all data points in a set are identical, offering no variability among them.

Expected Returns

The expected yield from an investment, considering the likelihood of different results.

Positive Variance

The difference between actual performance and expected performance where the actual outcome is more favorable than what was anticipated.

Weights

In finance, it refers to the proportion of each component's value in a portfolio or in a weighted average calculation.