Question: A new van was purchased for $40,000 and was estimated to have a life of 4 years or 110,000 miles; trade-in (residual) value is estimated to be $4,800. In the first year, the van was driven for 27,500 miles.
a. Use the units-of-production method to determine the depreciation per mile (unit).
b. What is the total depreciation expense for the first year?