The Records of Pam Company Showed the Following About a Machine

question 61

Multiple Choice

The records of Pam Company showed the following about a machine on January 1,20H: Purchased 1/1/20E for $35,000
Accumulated depreciation at January 1,20H,$26,400
On July 1,20H,the machine was sold for $7,000.Depreciation for the first six months of 20H was $1,467.The gain or loss on disposal would be which of the following?

• A)$133 loss
• B)$133 gain
• C)$1,600 loss
• D)$1,600 gain

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Definitions:

Marginal Cost

The increase in total cost that arises from producing an additional unit of output, reflecting the cost of producing one more unit.

Marginal Revenue

The added revenue that comes from the sale of an extra unit of a good or service.

Exiting an Industry

The process whereby businesses cease operations in a specific sector due to various reasons, such as unprofitability, strategic realignment, or market saturation.

Shutting Down

A short-term decision by a firm to halt production due to market conditions, not necessarily implying going out of business.