An improvement made to a machine increased its production capacity by 25% without extending the machine's useful life.The cost of the improvement should be

A) recorded as an expense
B) debited to Accumulated Depreciation
C) capitalized in the machine account
D) allocated between Accumulated Depreciation and the machine account

Production Capacity

The maximum output a business can produce in a given period under normal conditions.

Accumulated Depreciation

The total amount of depreciation expense that has been charged against a fixed asset since it was put into use.

Useful Life

The estimated period over which an asset is expected to be usable by the company, impacting depreciation calculations.