Answered: How does replacement cost depreciation…

How does replacement cost depreciation differ from historical cost methods? a) Uses longer life estimates b) Based on current asset values c) Requires straight-line method d) Ignores salvage value

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 5DQ: What is a relevant cost? Explain why depreciation on an existing asset is always irrelevant.

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Question

how does replacement cost depreciation differ from historical cost methods?

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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How does replacement cost depreciation differ from historical cost methods? a) Uses longer life estimates b) Based on current asset values c) Requires straight-line method DIgnores salvage value
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