Answer:
$138,470
Step-by-step explanation:
cost of mine = $2,640,000
residual value of the land = $1,408,000
cost of equipment = $570,000
residual value = $54,100
it should contain 770,000 tons of copper
units of production depreciation method:
- depreciation of mine = ($2,640,000 - $1,408,000) / 770,000 tons of copper = $1.60 per ton of copper
- depreciation of equipment = ($570,000 - $54,100) / 770,000 tons of copper = $0.67 per ton of copper
- total depreciation per ton of copper = $1.60 + $0.67 = $2.27
since 61,000 tons were extracted, then the depreciation expense = 61,000 x $2.27 = $138,470