Julie’s Bakeshop bought a loaf bread machine for P500,000 on June 1, 2010. It is estimated that it will have a useful life of 10 years, a scrap value of P10,000, production of 400,000 loaves of bread and working hours of 150,000. The company uses the machine for 15,000 hours in 2010 and 20,000 hours in 2011. The machine produces 40,000 loaves in 2010 and 50,000 loaves in 2011. Compute the depreciation in 2011 using (a) output method (b) working hours/service method.

Julie’s Bakeshop bought a loaf bread machine for P500,000 on June 1, 2010. It is estimated that it will have a useful life of 10 years, a scrap value of P10,000, production of 400,000 loaves of bread and working hours of 150,000. The company uses the machine for 15,000 hours in 2010 and 20,000 hours in 2011. The machine produces 40,000 loaves in 2010 and 50,000 loaves in 2011. Compute the depreciation in 2011 using (a) output method (b) working hours/service method.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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