Question
1. Which of the following is true of depreciation expense calculated using the straight-line method? a.Depreciation expense increases over the useful life of an asset.
1. Which of the following is true of depreciation expense calculated using the straight-line method?
a.Depreciation expense increases over the useful life of an asset.
b.Depreciation expense varies with the units produced over the useful life of an asset.
c.Depreciation expense remains constant over the useful life of an asset.
d.Depreciation expense first decreases and then increases over the useful life of an asset.
2. The _____ calculates depreciation based on usage instead of the years of service anticipated.
a.Modified Accelerated Cost Recovery System (MACRS)
b.units-of-production method
c.double-declining-balance method
d.straight-line method
3. Snowstone Company purchased an ice cream cone manufacturing machine for $20,000. The machine is estimated to have a useful life of 100,000 cones, and it is expected to have a trade-in value of $5,000. The machine's depreciation per unit is equal to:
a.$0.15 per cone.
b.$0.42 per cone.
c.$0.34 per cone.
d.$0.20 per cone.
4. Which of the following mathematical equations is used to calculate depreciation per unit under the units-of-production method of depreciation?
a.Depreciation per Unit = Revenue / Total Units-of-Production
b.Depreciation per Unit = Cost of Asset / Total Units-of-Production
c.Depreciation per Unit = (Cost of Asset Maintenance Expense) / Total Units-of-Production
d.Depreciation per Unit = (Cost of Asset Trade-in Value) / Total Units-of-Production
5. Assume that the depreciation expense for a truck is $0.12 per mile calculated under the units-of-production method. The truck travels a total distance of 9,000 miles in Year 1. Which of the following is the depreciation expense for Year 1?
a.$1,800
b.$2,230
c.$2,000
d.$1,080
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