Calculate the hourly ownership cost for the second year of operation of the 465-horsepower twin- engine scraper. This equipment will be to be operated 8 hours per day, and 250 days per year in average conditions. Use the Sum of Years Digits method of depreciation and as the following information. Initial cost: $186,000 Tire cost: $14,000 Estimated life: 5 years Salvage value: $22,000 Interest on the investment: 8% Insurance: 1.5% Storage: 0.5% Fuel price: $2.00/gallon Operator’s wages: $24.60/hour
Calculate the hourly ownership cost for the second year of operation of the 465-horsepower twin- engine scraper. This equipment will be to be operated 8 hours per day, and 250 days per year in average conditions. Use the Sum of Years Digits method of depreciation and as the following information. Initial cost: $186,000 Tire cost: $14,000 Estimated life: 5 years Salvage value: $22,000 Interest on the investment: 8% Insurance: 1.5% Storage: 0.5% Fuel price: $2.00/gallon Operator’s wages: $24.60/hour
Calculate the hourly ownership cost for the second year of operation of the 465-horsepower twin- engine scraper. This equipment will be to be operated 8 hours per day, and 250 days per year in average conditions. Use the Sum of Years Digits method of depreciation and as the following information. Initial cost: $186,000 Tire cost: $14,000 Estimated life: 5 years Salvage value: $22,000 Interest on the investment: 8% Insurance: 1.5% Storage: 0.5% Fuel price: $2.00/gallon Operator’s wages: $24.60/hour
3. Calculate the hourly ownership cost for the second year of operation of the 465-horsepower twin- engine scraper. This equipment will be to be operated 8 hours per day, and 250 days per year in average conditions. Use the Sum of Years Digits method of depreciation and as the following information. Initial cost: $186,000 Tire cost: $14,000 Estimated life: 5 years Salvage value: $22,000 Interest on the investment: 8% Insurance: 1.5% Storage: 0.5% Fuel price: $2.00/gallon Operator’s wages: $24.60/hour
Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video
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