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For Bus #3, calculate depreciable cost per mile under units-of-activity method.

For Bus #3, calculate depreciable cost per mile under units-of-activity method.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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### Current Attempt in Progress In recent years, Splish Brothers Company has purchased three machines. Due to frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, leading to the use of various methods. The information regarding the machines is summarized in the table below: | Machine | Acquired | Cost | Salvage Value | Useful Life (in years) | Depreciation Method | |---------|---------------|----------|---------------|------------------------|-----------------------| | 1 | Jan. 1, 2020 | $99,100 | $12,500 | 8 | Straight-line | | 2 | July 1, 2021 | $91,500 | $11,000 | 5 | Declining-balance | | 3 | Nov. 1, 2021 | $101,500 | $7,500 | 6 | Units-of-activity | For the declining-balance method, Splish Brothers Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 47,000. Actual hours of use in the first 3 years were: 2021 - 900 hours; 2022 - 4,000 hours; and 2023 - 8,200 hours. #### (a1) For Bus #3, calculate the depreciable cost per mile under the units-of-activity method. Depreciable cost: $_______ per mile
Transcribed Image Text:### Current Attempt in Progress In recent years, Splish Brothers Company has purchased three machines. Due to frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, leading to the use of various methods. The information regarding the machines is summarized in the table below: | Machine | Acquired | Cost | Salvage Value | Useful Life (in years) | Depreciation Method | |---------|---------------|----------|---------------|------------------------|-----------------------| | 1 | Jan. 1, 2020 | $99,100 | $12,500 | 8 | Straight-line | | 2 | July 1, 2021 | $91,500 | $11,000 | 5 | Declining-balance | | 3 | Nov. 1, 2021 | $101,500 | $7,500 | 6 | Units-of-activity | For the declining-balance method, Splish Brothers Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 47,000. Actual hours of use in the first 3 years were: 2021 - 900 hours; 2022 - 4,000 hours; and 2023 - 8,200 hours. #### (a1) For Bus #3, calculate the depreciable cost per mile under the units-of-activity method. Depreciable cost: $_______ per mile
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