At the Beginning of 2010, Your Company Buys a $30,000

question 115

Essay

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.

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Definitions:

Working Life

The period during which a person participates in the workforce, engaging in paid employment or professional activities.

Recycled

The process of converting waste materials into new materials and objects, aimed at reducing consumption of fresh raw materials and energy usage.

Competitive Advantage

Competitive advantage refers to the attributes that allow an organization to outperform its competitors, including cost structure, product offerings, customer service, and more.

Product Replication

The act of duplicating or making a copy of an existing product, typically to broaden market reach or capitalize on the success of the original item.