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Sunland Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 145,000 miles. Taxi 10 cost $29,500 and is expected to have a salvage value of $500. Taxi 10 was driven 32,000 miles in 2021 and 30,100 miles in 2022.

Sunland Taxi Service uses the unitsofactivity method in computing depreciation on its taxicabs Each cab is expected to be driven 145000 miles Taxi 10 cost 29500 class=

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Samawati

Answer:

see below

Explanation:

Under the unit of depreciation method, depreciation expense is per unit used.

The calculation of depreciation expense per unit is as per the formula.

DE per unit (Asset Cost − Salvage Value)​/ Estimated Production Output

For Tax 10:

=($29,500- $500 ) /145,000 miles

= $29,000/145,000

=$0.2

The depreciation expense is $0.2 per mile.

Depreciation for 2021 will be depreciation per mile multiplied by miles driven.

=32,000 x $0.2

=$6,400

Depreciation for 2022

=30100 x $0.2

=$6,020

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