A Company Discarded a Display Case That It Had Originally

question 66

Multiple Choice

A company discarded a display case that it had originally purchased for $8,000.The case had $7,200 worth of accumulated depreciation.The company should recognize a(n) :

• A)$0 gain or loss
• B)$800 loss
• C)$800 gain
• D)$8,000 loss
• E)$7,200 loss

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Definitions:

Work in Process

Inventory that represents partially finished goods, which are still undergoing manufacturing processes.

Job-Order Costing

A cost accounting system used to accumulate costs per job rather than per time period, appropriate for customized products or services.

Job-Order Costing

Job-order costing is an accounting method used to track costs and evaluate the profitability of custom jobs, focusing on specific, distinct jobs or batches.

Predetermined Overhead Rates

An estimate of indirect costs used to allocate overhead expenses to products or services based on a specific activity base, recalculated for clarity.