Question
In recent years, Tamarisk Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of
In recent years, Tamarisk Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below.
Machine | Acquired | Cost | Salvage Value | Useful Life (in years) | Depreciation Method | |||||
---|---|---|---|---|---|---|---|---|---|---|
1 | Jan. 1, 2020 | $ 97,200 | $ 13,000 | 8 | Straight-line | |||||
2 | July 1, 2021 | 89,500 | 10,000 | 5 | Declining-balance | |||||
3 | Nov. 1, 2021 | 86,000 | 8,000 | 6 | Units-of-activity |
For the declining-balance method, Tamarisk Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 39,000. Actual hours of use in the first 3 years were 2021, 700; 2022, 4,300; and 2023, 7,400.
Question: For Machine #3, calculate depreciable cost per hour under units-of-activity method.
Depreciable cost | $ enter depreciable cost per mile in dollars | per hour |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started