Which of the Following Is True of Replacement Projects

question 147

Multiple Choice

Which of the following is true of replacement projects?

• A)They generate costs that are planned and directly related to the sales forecast.
• B)Their benefits usually come from expected savings.
• C)They need not be adjusted for depreciation and taxes.
• D)They imply increases in costs and revenues.

---

Definitions:

Job-Order Costing System

An accounting method used to track costs and evaluate the profitability of individual jobs or orders by accumulating the costs associated with a specific batch of products.

Overapplied

A situation where the allocated manufacturing overhead costs are more than the actual overhead costs incurred, resulting in a variance.

Underapplied

A situation where the allocated or overhead costs assigned to products or services are less than the actual overhead incurred.

Cost of Goods Sold

The total cost of manufacturing or acquiring a product or service that is sold to customers.