Question

Windsor, Inc. purchased a delivery truck for $32,000 on January 1, 2022. The truck has an expected salvage value of $4,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 16,600 in 2022 and 13,100 in 2023. (a1) Calculate depreciable cost per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciable cost

Answer 1

Depreciable cost per mile= $0.28

Step-by-step explanation:

Giving the following information:

Purchase price= $32,000

Salvage value= $4,000

Miles= 100,000

To calculate the depreciable cost per mile under the units-of-activity method, we need to use the following formula:

Depreciable cost per mile= (original cost - salvage value)/useful life of production in miles]

Depreciable cost per mile= (32,000 - 4,000) / 100,000

Depreciable cost per mile= $0.28