Which of the Following Is Included in the Cost of a Plant

question 138

Multiple Choice

Which of the following is included in the cost of a plant asset?

• A) amounts paid to make the asset ready for its intended use
• B) regular repair and maintenance costs
• C) replacement of damaged parts of the asset
• D) wages of workers who use the asset in normal operations

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Definitions:

Job-Order Costing

A cost accounting system that assigns costs to specific production batches or jobs, enabling the calculation of the cost per job.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production based on a specific activity base.

Machine-Hours

A measure of the amount of time a machine is used during the production process, often used in costing and budgeting.

Direct Labor-Hours

The number of hours spent by workers directly involved in the manufacturing of a product or delivery of a service.