In Order to Calculate the Third Year's Depreciation on an Asset

question 58

Multiple Choice

In order to calculate the third year's depreciation on an asset using the sum-of- the-years'-digits method,which of the following must be known about the asset?

• A) Its acquisition cost
• B) Its estimated salvage value
• C) Its estimated useful life
• D) All of these must be known.

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Definitions:

Complete Orders

The total orders that have been fully processed and are ready for delivery or have been delivered to customers.

Throughput Time

The total time it takes for a unit to go through production from the start to the end, including both processing and waiting times.

Fill Orders

The process of completing a customer's purchase order by preparing and dispatching the ordered goods.

Delivery Cycle Time

The total time taken from receiving an order to delivering the product to the customer.