Copy Equipment Was Acquired at the Beginning of the Year

question 167

Essay

Copy equipment was acquired at the beginning of the year at a cost of $72,000 that has an estimated residual value of $9,000 and an estimated useful life of five years. It is estimated that the machine will output an estimated 1,000,000 copies. This year, 315,000 copies were made. Determine the
(a) depreciable cost,
(b) depreciation rate, and
(c) units-of-activity depreciation for the year.

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Definitions:

Good

Represents a tangible product or service that satisfies some human want or need.

Complements

Goods or services that are used together, such that an increase in demand for one typically increases demand for the other.

Demand for Cream

The consumer interest and willingness to purchase cream, influenced by culinary trends, diet preferences, and availability of substitute products.

Demand Curve

A graph representing the relationship between the quantity of a good desired and its price.