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

question 71

Multiple Choice

Mott Company uses the units-of-activity method in computing depreciation.A new plant asset is purchased for $24,000 that will produce an estimated 100,000 units over its useful life.Estimated residual value at the end of its useful life is $2,000.What is the depreciation cost per unit?

• A)$2.20
• B)$2.40
• C)$.22
• D)$.24

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Definitions:

Igneous Rock

Stone generated by the hardening and crystallization of molten rock material.

Bowens Reaction Series

Bowen's Reaction Series describes the sequence in which minerals crystallize from cooling magma according to their chemical composition and temperature.

Crystallize

The process by which a solid forms, where the atoms or molecules are highly structured in a pattern known as a crystal lattice.

Olivine

A green iron-magnesium silicate mineral that composes much of the upper mantle and also occurs in mafic and ultramafic igneous rocks.