Blue Highway Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2007,at a cost of $120,000. Over its 4-year useful life, the bus is expected to be driven 160,000 miles. Salvage value is expected tobe $8,000.
Compute the depreciation cost per unit.
Prepare a depreciation schedule assuming actual mileage was:2007, 40,000; 2008, 52,000; 2009, 41,000; and 2010, 27,000.