Units of Production Method Assignment
February 24th, 2020
3. A local United Way has recently purchased a mini-van at a cost of $45,000 to provide free transportation services to elderly people who could not otherwise move around. The organization plans to trade it in for $10,000 after it has gone 80,000 miles.
The following information is available on the vehicle for miles traveled over a five-year period: 15,000 miles in year 1, 17,000 miles in year 2, 20,000 miles in year 3, 15,000 miles in year 4, and 13,000 miles in year 5. Calculate the depreciation expense for each of the five years using the units of production method. Please write it out. .