Machinery Is Purchased for $80 000

question 29

Multiple Choice

Machinery is purchased for $80 000.It is estimated that it has a useful life of 5 years and a residual value of $5 000.Using the straight-line method,the carrying value of the machine at the end of the fourth year of the machine's useful life is:

• A) $15 000
• B) $80 000
• C) $20 000
• D) $60 000

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Definitions:

Flexible Budgets

Budgets that adjust or flex according to changes in activity levels or other factors that influence operating expenses.

Unfavorable Variance

A situation where actual costs exceed budgeted or expected costs.

Efficiency Variance

The difference between the actual input used in production and the standard input that was expected to be used.

Spending Variance

The difference between the actual amount spent and the budgeted amount for a category or period, indicating over or underspending.