Question

Brief Exercise 9-14 (Part Level Submission) Kwik Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 141,000 miles. Taxi 10 cost $25,200 and is expected to have a salvage value of $500. Taxi 10 was driven 28,000 miles in 2016 and 30,900 miles in 2017 7 (a Determine the depreciation cost. (Round answer to 2 decimal places, e.g. 1.25.) Depreciable cost Click if you would like to Show Work for this question: per unit Open Show Work

Answer 1

Under Units of production method, depreciation is calculated based on budgeted total units of production and each year's actual units of production. That is, Depreciable cost per unit Depreciable cost of the asset/ Estimated total estimated units to be produced Cost of the asset Salvage value Depreciable cost of the asset Estimated total units of production Depreciation per unit (per mile driven)S0.18 (S24,700/141,000 units] $500 $24,700 [$25,200 $500] 141,000