The Units of Production Method of Cost Allocation
Not what you're looking for?
You are asked to make a depreciation schedule for a business asset. A depreciation schedule shows the remaining value of the asset at the end of each time period.
Scenario B: A $26,000 company car is expected to be driven for 120,000 miles and then salvaged for $3,500. Find the unit depreciation using the units-of-production method.
Purchase this Solution
Solution Summary
The units-of-production method is in many ways very similar to the straight-line method of depreciation in that in both cases, we must divide the cost of the vehicle less its salvage value by the estimate of its useful life. Using the straight-line method of the depreciation, the calculated estimate is in years, for the unit-of-production method the estimate is in units.
Solution Preview
The units-of-production method is in many ways very similar to the straight-line method of depreciation in that in both cases, we must divide the cost of the vehicle less its salvage value by the estimate of its useful life. Using the straight-line method of the depreciation, the calculated estimate is in years, for the unit-of-production method the estimate is in units.
So, to answer Scenario B, we need to be able to estimate the useful life of the vehicle in units of production, which in this case is ...
Purchase this Solution
Free BrainMass Quizzes
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.