Question

The Flintstone Construction Company delivers dirt and stone from local quarries to its construction sites. A new truck that was purchased for a cost of $121,000 at the beginning of the year was expected to deliver 204,000 tons over its useful life. The following is a breakdown of the tons delivered during the year to each construction site: Construction Sites: Tons Delivered: A 2,400 B C 3,900 4,400 D 1,900 How much truck depreciation should be allocated to Site A? (Do not round intermediate calculations. Round your answer to the nearest dollar.)

Answer 1

Depreciation to be allocated to Site A = $1,424

Working

Units of Production method
A	Cost	$ 121,000
B	Residual Value	$ 0
C=A - B	Depreciable base	$ 121,000
D	Usage in units(in Hours)	204000
E	Depreciation per hour	$ 0.59

.

Depreciation schedule-Units of Activity
	Book Value	Usage	Depreciation expense
Site A	$ 121,000	2400	$ 1,424