On January 1, 2014, Rugh Company Purchased Equipment with a List

question 66

Multiple Choice

On January 1, 2014, Rugh Company purchased equipment with a list price of $12,000 with a 2% cash discount. The equipment was delivered under terms of FOB destination and freight costs amounted to $400. A total of $1,000 was paid for installation and testing. During the first year, Rugh paid $300 for insurance on the equipment and another $250 for routine maintenance and repairs. Rugh uses the units-of-production method of depreciation. Useful life is estimated at 5 years or 300,000 units and estimated salvage value is $2,000. During 2014, the equipment produced 60,000 units. What is the amount of depreciation for 2014?

• A) $2,152
• B) $2,352
• C) $2,552
• D) $2,632

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Definitions:

Standard Deviation

A measure that is used to quantify the amount of variation or dispersion of a set of data values.

Standard Error

The typical variability or spread in the sampling distribution of a statistic, most commonly the mean, is referred to as the standard deviation.

T-statistic

The t-statistic is a ratio calculated from the difference between a sample mean and a population mean, divided by the standard error of the mean.

Null

Often refers to a hypothesis which assumes no significant difference or effect in a statistical analysis.