A Poultry Farmer Is Interested in Purchasing an Egg Tester

question 31

Multiple Choice

A poultry farmer is interested in purchasing an egg tester that can measure weight, albumin height, yolk color, and Haugh units all at the touch of a button. The unit will cost $6,900 and is expected to last 10 years at which point it can be sold for $500 to a farmer in a less stringently controlled egg market. What is the annual depreciation under the straight line method?

• A) $640
• B) $690
• C) $50
• D) $740

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Definitions:

Collection of Credit Sales

The process of receiving payment from customers who have purchased goods or services on credit.

Accounts Payable Balance

The total amount owed by a business to its suppliers or creditors at any given time, representing liabilities for goods and services received but not yet paid for.

Budgeted Cost PURCHASES

The projected expenses associated with acquiring materials or goods needed for production or sale.

Raw Materials Purchases

The total cost incurred by a company for buying the raw materials required in the production process.