Refer to Prince Edward Company

question 28

Multiple Choice

Refer to Prince Edward Company. What is the cost formula for maintenance cost when using the result of regression?

• A) $9.82 × machine hours
• B) $985 × machine hours
• C) $985 + ($9.82 × machine hours)
• D) ($4,686 - $3,956)/(386 - 310)

---

Definitions:

Fixed Asset

A durable, physical asset that a company possesses and employs in its business activities to produce revenue.

Salvage Value

Salvage value is the estimated residual value of an asset at the end of its useful life, indicating how much the asset can be sold for after it is no longer useful for its intended purpose.

Estimated Life

The expected period over which an asset will be useful in the operations of a business.

Units-Of-Output Method

A depreciation technique that allocates the cost of an asset based on its usage, work output, or units produced.