When the Amount of Use of a Fixed Asset Varies

question 90

Multiple Choice

When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is

• A) double-declining-balance method
• B) straight-line method
• C) units-of-output method
• D) MACRS

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Definitions:

Marginal Output

The additional output that results from increasing the production input by one unit.

Total Output

The total value of all goods and services produced in an economy during a specific period.

Workers

Individuals engaged in any form of employment, contributing labor for the production of goods and services.

ATC

Average Total Cost, a term in economics that refers to the total cost per unit of output, calculated by dividing the total cost by the quantity of output produced.