Question - At the beginning of 2010, your company buys a $30,000 piece of equipment that it expects to use for 4 years. The company expects to produce a total of 200,000 units. The equipment has an estimated residual value of $2,000.
a. Find the depreciable cost.
b. Find the depreciation expense per year under the straight-line method.
c. Prepare a depreciation schedule under the straight-line method.
d. Find the depreciation rate per unit under the units-of-production method.
e. Compare the annual depreciation expense using both methods assuming constant annual production.
f. Prepare a depreciation schedule under the units-of-production method if, 44,000 units are produced in one year, 53,000 units in year two, 51,000 units in year three, and 52,000 units in year four.