Sparrow Manufacturing Manufactures Small Parts and Uses an Activity-Based Costing

question 122

Multiple Choice

Sparrow Manufacturing manufactures small parts and uses an activity-based costing system.

The following parts were produced in October with the following information:

Total unit cost for part B is

• A)$6.06.
• B)$4.34.
• C)$3.08.
• D)$2.34.

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Definitions:

Intangible

Assets that lack physical substance but have value due to their intellectual property or other non-physical qualities, such as patents, trademarks, and goodwill.

Amortisation

The systematic allocation of the depreciable amount of an intangible asset over its useful life.

Impairment

A reduction in the recoverable value of an asset below its carrying amount on the balance sheet, leading to a write-down of its value.

Intangible Assets

Non-physical assets owned by a business that have a useful life, such as patents, trademarks, and copyrights.