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Eduardwww [97]
4 years ago
11

A truck acquired at a cost of $69,000 has an estimated residual value of $12,000, has an estimated useful life of 300,000 miles,

and was driven 77,000 miles during the year. Determine the following. If required, round your answer for the depreciation rate to 2 decimal places.
(a) The depreciable cost $
(b) The depreciation rate $ per mile
(c) The units-of-activity depreciation for the year $
Business
1 answer:
Anuta_ua [19.1K]4 years ago
6 0

Answer:

A. $57,000

B. Depreciation rate per mile is $0.19

C. Depreciation is $14,630

Explanation:

a. cost of the truck less the residual value.

Cost of the truck        $69,000

Less: Residual value  <u>$12,000</u>

                                   $57,000

b. Depreciation rate per mile is computed by dividing cost of the truck less the residual value over the estimated useful life.

$57,000 / 300,000 miles = $0.19

c. Units-of-activity depreciation for the year is computed by multiplying miles driven for the year by depreciation rate per mile.

77,000 miles x $0.19 = $14,630

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Attached is the complete questions containing the missing variables:

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Schuepfer Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 3,600 units ar
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