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ANALYZE: computer equipment, which was estimated to last 2 yrs, has been used for 1 month, representing estimated expense of $400?

User RuslanY
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Final answer:

The monthly expense of using computer equipment with a total estimated cost of $400 over 2 years is about $16.67, calculated using straight-line depreciation. This cost takes into account the time and power consumption, and varies based on usage.

Step-by-step explanation:

Analyzing the expense of computer equipment, we need to consider its estimated lifespan and the cost over time. For computer equipment estimated to last 2 years with an expense of $400, using it for 1 month would equate to 1/24th of its total lifespan. From a business accounting perspective, this can be treated as a depreciation expense. With a straight-line depreciation method, the monthly expense would be $400 divided by 24 months, resulting in approximately $16.67 for the month in question.

This calculated cost is assuming that the expense is evenly spread over the 2-year usage period, which represents a typical accounting approach for fixed assets. Therefore, if the computer equipment has been used for 1 month, the estimate of its expense is not particularly high, but it's important to recognize that the cost also comprises the combination of power consumption and operational time, which varies based on usage intensity.

User Jason Kotzin
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