When Deciding the Useful Life of an Intangible Asset,which of the Following

question 10

Multiple Choice

When deciding the useful life of an intangible asset,which of the following is NOT a factor to be considered.

• A)expected action of competitors.
• B)the likely resale value.
• C)the stability of the industry in which that asset operates.
• D)typical product life cycles for the asset.

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Definitions:

Conversion Costs

The combined costs of direct labor and manufacturing overhead used to convert raw materials into finished products.

FIFO Method

A method of inventory valuation that assumes the first items placed in inventory are the first sold, hence, the cost of the oldest inventory is used to determine the cost of goods sold.

Process Costing

A costing method used where similar products are produced continuously, allocating production costs based on the process or department.

Conversion Cost

The total cost of transforming raw materials into finished goods, including labor and manufacturing overhead.