Equipment Was Acquired at the Beginning of the Year at a Cost

question 82

Essay

Equipment was acquired at the beginning of the year at a cost of $75,000.The equipment was depreciated using the straight-line method based on an estimated useful life of six years and an estimated residual value of $7,500.

---

Definitions:

Flexible Budgeting

An approach in budgeting that allows for adjusting budget allocations based on varying levels of activity or output.

Unfavorable Variance

A situation where actual costs exceed the standard or budgeted costs, often indicating inefficiencies or increased expenses.

Favorable Variance

A financial term indicating that actual costs were lower or revenues were higher than planned.

Budgeted Amount

The projected costs or revenues allocated to a specific activity or period, based on estimates.