We Record a Long-Term Asset at Its Cost Less All

question 84

True/False

We record a long-term asset at its cost less all expenditures necessary to get the asset ready for use.

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Definitions:

Actual Manufacturing Overhead Cost

The actual costs incurred for indirect manufacturing expenses, such as utilities, rent, and maintenance.

Year

A period of time consisting of 12 months or 365 days, used as a basic unit for measuring time in relation to the earth's orbit around the sun.

Cost of Goods Available for Sale

The total cost of inventory that a business has ready for sale, comprising both beginning inventory plus the cost of goods manufactured.

Overapplied

A situation where the allocated manufacturing overhead cost exceeds the actual manufacturing overhead costs incurred, resulting in an apparent surplus.