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Homework answers / question archive / 1)Machine costing $480,000 has an estimated salvage value of $40,000 and (lifetime output is estimated at 110,000 units; a firm produced 12,000 units in year one and 18,000 in year two)
1)Machine costing $480,000 has an estimated salvage value of $40,000 and (lifetime output is estimated at 110,000 units; a firm produced 12,000 units in year one and 18,000 in year two). The depreciation expense for the second year using the units of (activity) method is----.
Select one:
a. $73,000.
b. $72,000.
c. $75,000.
d. $74,000.
The current maturities on long term debt is----
Select one:
a. long term asset.
b. current liability.
c. long term liability.
d. Current asset.
2)Which of the following is not typical of traditional costing systems? Use of a single predetermined overhead rate. Assumption of correlation between direct labor and incurrence of overhead cost. Use of direct labor hours or direct labor cost to assign overhead. Use of multiple cost drivers to allocate overhead
1)Depreciation expense for year 2 = Depreciation per unit * Units produced in year 2
Depreciation per unit = (Costing - Salvage)/Estimated output for lifetime
= ($480000 - $40000)/110000 units = $4
Depreciation expense for year 2 = $4 * 18000 units = $72000
Option (b) is correct
(2) The current maturities on long term debt is Current liability.
Under long term debt, part which having long term maturity is long term debt & part which having current maturity is current liability
Hence option (b) is correct
2)Correct: Use of multiple cost drivers to allocate overhead