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Heatherbrae Co. uses the units-of-production method to estimate depreciation. The company purchased a new machine for $48,000 that will produce an estimated 330,000 units over its useful life. The estimated residual value of the machine is $4,000. What is the depreciation rate per unit?

Respuesta :

Answer:

Depreciation per unit= 0.133 (Approx)

Explanation:

Given:

Cost of machine = $48,000

Total unit produced = 330,000 units

Residual value of the machine = $4,000.

Depreciation rate per unit = ?

Computation of depreciation rate per unit:

Depreciation per unit = (Cost of machine - Salvage value) / Total unit produced

Depreciation per unit= ($48,000 - $4,000) / 330,000 units

Depreciation per unit= ($44,000) / 330,000 units

Depreciation per unit= 0.133 (Approx)

anthougo

The depreciation rate per unit for Heatherbrae Co. is $0.133.

What is the unit-of-production depreciation method?

The unit-of-production depreciation method estimates the depreciation expense per unit by dividing the depreciable amount by the estimated useful life of the asset.

For each period, the depreciation expense per unit is multiplied by the units of production to determine the period's total depreciation expense.

Data and Calculations:

Cost of machine = $48,000

Residual value = $4,000

Depreciable amount = $44,000 ($48,000 - $4,000)

Estimated useful life in units = 330,000

Depreciation expense per unit = $0.133 ($44,000/330,000)

Thus, the depreciation rate per unit for Heatherbrae Co. is $0.133.

Learn more about the unit-of-production depreciation method at https://brainly.com/question/14455224

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