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Homework answers / question archive / iuestion 32 (1 point) Units-of-production is an appropriate depreciation method to use when 0 1) it is impossible to determine the productivity of the asset
iuestion 32 (1 point)
Units-of-production is an appropriate depreciation method to use when 0 1) it is impossible to determine the productivity of the asset. 0 2) the asset's use will be constant over its useful life. 0 3) the company is a manufacturing company. 0 4) the asset's use varies significantly from one period to another.
uestion 33 (1 point) An intangible asset should 0 1) not be amortized if it has an finite life. 0 2) not be amortized if it has an indefinite life. 0 3) be amortized over its legal or useful life, whichever is longer. 0 4) be amortized over 5 years or less.
32) Under units of activity method:
Depreciation per Unit of Production = (Cost - Salvage Value)/Expected Production during the Useful Life of Asset
Now, depreciation per unit is allocated as actual depreciation as per number of units produced in a year.
So, the actual depreciation is allocated based on number of units produced in each year and so it is assumed that the productivity of the asset varies from year to year due to which different depreciation is charged each year.
So, the correct option is 4th "the productivity of the asset varies significantly from one period to another".
33) The correct option is 2nd "not be amortized if it has an indefinite life".
An intangible asset should not be amortized if it has an indefinite life.
