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Comparing the service output method with straight line for a machine that stands idle for a year, service output charges

  • A.nothing for that year
  • B.the same as straight line
  • C.more than straight line
  • D.the whole remaining book value

Answer: A

Correct answer: nothing for that year

The service output method charges by units produced, so a machine that produces nothing is charged nothing and its book value is unaltered. Straight line would charge the full annual amount regardless. The difference is exactly why the method is chosen for equipment whose use is irregular.

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