Question

jet costs and is expected to fly miles during its ​-year life. Residual value is expected to be zero because the plane was used when acquired. If the plane travels miles the first​ year, how much depreciation should record under the​ units-of-production method?

Answer 1

Answer: c. $3,960,000‬

Explanation:

Using the units-of-production method of depreciation, depreciation is done per unit used.

With a residual value of zero, the formula is;

= Cost x Millage used / Useful life mileage

= 55,000,000 x 36,000,000/500,000,000

= $3,960,000‬