Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


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)

Accounting

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

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

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

  • Traditional costing system uses a single predetermined overhead rate to allocate the overhead. The overhead rate is calculated based on direct labor hours worked assuming a correlation between direct labor and overhead costs.
    • Predetermined overhead rate = Estimated total overhead costs ÷ Estimated total direct labor hours