Vickers Company Uses the Units-Of-Activity Method in Computing Depreciation

question 145

Multiple Choice

Vickers Company uses the units-of-activity method in computing depreciation.A new plant asset is purchased for $36,000 that will produce an estimated 110,000 units over its useful life.Estimated salvage value at the end of its useful life is $3,000.What is the depreciation cost per unit?

• A)$3.00.
• B)$3.27.
• C)$0.30.
• D)$0.33.

---

Definitions:

Ad Valorem Duty

A type of tax based on the assessed value of an item, typically used for customs purposes.

Foreign Manufacturer

A company that produces goods in a country other than where the goods are sold or used.

Euro

The official currency of the eurozone, which is used by many of the European Union's member states.

U.S. Dollars

The official currency of the United States, commonly abbreviated as USD.