The factors that need to be determined to compute depreciation are an asset's: a. Cost, residual value, and physical life. b. Fa
1 answer:
Answer:
Cost, residual value, and service life
Explanation:
The computation of depreciation requires three (3) inputs.
Cost: the acquisition cost of the asset
Residual value: the value at which the asset will be sold
Service life: the number of years the assets will be used by a company (also known as useful life).
Thus
Physical life will be inappropriate because the physical life includes not only the useful life of the asset in a company, but also the life of the asset when it is sold.
The fair value of an comes into play when the asset is revalued, usually for a sale. Replacement value is similar to fair value as it is the market value of the asset at a given point in time.
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Answer:
price variance 3,940 U
quantity variance 2,800 F
Explanation:
DIRECT MATERIALS VARIANCES
std cost $7.00
actual cost $7.10
quantity 39,400
difference $(0.10)
price variance $(3,940.00)
The difference between std cost and actual cost is negative, we purchased at a higher cost. the variance is unfavorable.
std quantity 39,000.00 (7,800 manufactured units x 5 lbs per unit)
actual quantity 39,400.00
std cost $ 7.00
difference -400.00
quantity variance $ (2,800.00)
We used more lbs than our standard for the output. This means we are not efficient in the use of materials. this variance is unfavorable as well