The controller of Excello Manufacturing, Inc., wants to use analytical procedures toidentify the possible existence of idle equipment or the possibility that equipmenthas been disposed of without having been written off. Which of the following ratioswill best accomplish this objective?(1) Depreciation expense/book value of manufacturing equipment.(2) Accumulated depreciation/book value of manufacturing equipment.(3) Repairs and maintenance cost/direct labor costs.(4) Gross manufacturing equipment cost/units produced.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

The controller of Excello Manufacturing, Inc., wants to use analytical procedures to
identify the possible existence of idle equipment or the possibility that equipment
has been disposed of without having been written off. Which of the following ratios
will best accomplish this objective?
(1) Depreciation expense/book value of manufacturing equipment.
(2) Accumulated depreciation/book value of manufacturing equipment.
(3) Repairs and maintenance cost/direct labor costs.
(4) Gross manufacturing equipment cost/units produced.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting for Impairment of Assets
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education