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

question 223

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 100,000 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) $3.30.
• B) $3.60.
• C) $0.33.
• D) $0.36.

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