22. If an industrial firm uses the units-of-production method for computing depreciation on its only plant asset, factory machinery, the credit to accumulated depreciation from period to period during the life of the firm will A) vary with sales revenue. B) vary with production. C) vary with unit sales. D) be constant.

22. If an industrial firm uses the units-of-production method for computing depreciation on its only plant asset, factory machinery, the credit to accumulated depreciation from period to period during the life of the firm will A) vary with sales revenue. B) vary with production. C) vary with unit sales. D) be constant.

Name: 22. If an industrial firm uses the units-of-production method for comp
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: 22. If an industrial firm uses the units-of-production method for computing depreciation on its only plant asset, factory machinery, the credit to accumulated depreciation from period to period during the life of the firm willA) vary with sales reven

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 12MCQ: Which of the following statements is true? a. The fixed asset turnover ratio assists managers in...

See similar textbooks

Similar questions

Which of the following would probably properly classified as a step cost with respect to the volume of production ? Depreciation computed on an annual basis Total salaries paid to quality -control inspectors Real estate taxes President of the company's salary
In a manufacturing company, which of the following will affect gross profit? A change in the depreciation policy applied to production equipment Insurance paid on delivery vehicles Reduction in the overdraft interest rate Cost of training finance staff on the use of an accounting package
The following is a note accompanying a recent financial statement of International PaperCompany :Plant, Properties, and EquipmentPlant, properties, and equipment are stated at cost less accumulated depreciation. Expenditures forbetterments are capitalized, whereas normal repairs and maintenance are expensed as incurred. The units-of-production method of depreciation is used for major pulp and paper mills, and the straight-line method is used for other plants and equipment. Annual straight-line depreciation rates are, for buildings—21⁄2 percent to 81⁄2 percent, and for machinery and equipment—5 percent to 33 percent.Instructions a. Are the depreciation methods used in the company’s financial statements determined by cur-rent income tax laws? If not, who is responsible for selecting these methods? Explain. b. Does the company violate the consistency principle by using different depreciation methodsfor its paper mills and wood products facilities than it uses for its other plant and…
In a manufacturing company, which of the following will affect gross profit?a. A change in the depreciation policy applied to production equipmentb. Insurance paid on delivery vehiclesc. Reduction in the overdraft interest rated. Cost of training finance staff on the use of an accounting package
Jordan’s response about his approach to estimating a company’s need to reinvest in itsproductive capacity is most likely correct regarding:A. estimating the average age of the asset base.B. estimating the total useful life of the asset base.C. estimating the average remaining useful life of the asset base
Which of the following statements is true? a. The fixed asset turnover ratio assists managers in determining the estimated future capital expenditures that are needed. b. The average age of the fixed assets is computed by dividing accumulated depreciation by depreciation expense. c. If net sales increases, the fixed asset turnover ratio will decrease. d. A relatively low fixed asset turnover ratio signals that a company is efficiently using its assets.
For financial accounting purposes, depreciation on the equipment used to produce tote bags isa(n) ____________________. However, for financial accounting purposes, depreciationon any equipment used by the company in selling and administrative activities is classified asa(n) ______________________. In terms of cost behavior, depreciation is usually a(n)_________________________.
Portland Co. uses the straight-line depreciation method for depreciable assets. All assets are depreciated individually except manufacturing machinery, which is depreciated by the composite method. Required: 1. What factors should have influenced Portland’s selection of the straight-line depreciation method? 2. a. What benefits should derive from using the composite method rather than the individual basis for manufacturing machinery? b. How should Portland have calculated the manufacturing machinery’s annual depreciation in its first year of operation?
1. Under Unit of Production Method of Calculating Depreciation, if there is no production in any year, depreciation amount of that year will be a) Very Low b) Can't Say c) Zero d) Very High
Sebastian Company provided the following data pertaining to the total cost, residual value, and estimated life, respectively, of its machinery: Machinery A – 5,500,000; 500,000; 20 Machinery B – 2,000,000; 200,000; 15 Machinery C – 400,000; 0; 5 Sebastian computes depreciation on the straight line method. I What is the composite life of the assets? 13.3 16.0 18.0 19.8 II.. What is the composite rate of the assets? 5.70 6.18 6.25 6.78 III. What is the periodic depreciation of the assets? 450,300 488,220 493,750 535,620
The controller of Excello Manufacturing, Inc., wants to use analytical procedures toidentify the possible existence of idle equipment or the possibility that equipmenthas been disposed of without having been written off. Which of the following ratioswill best accomplish this objective?(1) Depreciation expense/book value of manufacturing equipment.(2) Accumulated depreciation/book value of manufacturing equipment.(3) Repairs and maintenance cost/direct labor costs.(4) Gross manufacturing equipment cost/units produced.
which one of the following is not an example of a committed fixed cost a . The cost of the accounting system of the company . b. None of the given answers . c. The depreciation cost of the Headquarters offices . d . The property taxes of the factory plant . e. The salary of the deputy manager of customer call center .