Day-Care Center ​

question 5

Short Answer

Day-Care Center
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A day-care center using the double-declining-balance method of depreciation purchased equipment costing $36,000 and put it use on June 1. The equipment is expected to have a useful life of 10 years and an estimated resale value of $2,400.
-Refer to the Day-Care Center scenario. Compute the book value at the end of the third year.​

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Definitions:

Variance Report

A document that compares actual financial performance to planned or budgeted performance, highlighting variances between these figures.

Machine Hours

A measure of the operating time of machines or equipment, typically used in allocating manufacturing costs.

Fixed Overhead Rate

A predetermined rate used to allocate fixed overhead costs to units of output, based on a standard level of activity.

Gross Profit

Sales minus the cost of goods sold.