Aggie, Inc. Aggie, Inc. Purchased a Truck at a Cost of $12,000

question 53

Multiple Choice

Aggie, Inc.
Aggie, Inc. purchased a truck at a cost of $12,000. The truck has an estimated salvage value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2011, and was used 27,000 hours in 2011 and 26,000 hours in 2012.
-
Refer to Aggie, Inc.'s information presented above, if Aggie uses the units-of-activity method, what is the depreciation rate per hour for the equipment?

• A) $1.00
• B) $1.10
• C) $ .10
• D) $ .12

---

Definitions:

Rental Capacity

The maximum number of units or space a property can offer for lease at any given time.

Automobile Rental

A service industry providing temporary access to vehicles on a short-term basis, typically ranging from a few hours to weeks.

OptQuest

An optimization software that uses various algorithms to find the best possible solutions to complex problems.

Crystal Ball

A metaphor often used to represent the attempt to predict or foresee future events, typically used in the context of speculation or forecasting.