Question

Swifty Company purchased a delivery truck for $26,000 on January 1, 2020. The truck has an expected salvage value of $1,000, and is expected to be driven 100,000 miles over its estimated useful life of 10 years. Actual miles driven were 12,800 in 2020 and 12,000 in 2021. (a1) Calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciation expense $ per mile

Answer 1

$0.25 per mile

Step-by-step explanation:

The computation of the depreciation expense per mile under units-of-activity method is shown below;

= (Purchase cost - expected salvage value) ÷ estimated driven miles

= ($26,000 - $1,000) ÷ 100,000 miles

= $0.25 per mile

Hence, the depreciation expense per mile under units-of-activity method is $0.25 per mile