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If a truck with a depreciable cost of

# If a truck with a depreciable cost of - Units-of-Activity...

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If a truck with a depreciable cost of \$80,000 (\$90,000 cost less \$10,000 estimated salvage value) is  expected to be driven 400,000 miles during its service life, the truck depreciates \$0.20 each mile  (\$80,000  ÷  400,000 miles = \$0.20 per mile). The following table shows how depreciation expense is  assigned to the truck based on the number of miles driven each year.
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Unformatted text preview: Units-of-Activity Depreciation Per-Unit Deprecia tion Cost \$90,000 Year 1 110,000 × \$0.20 = \$22,000 \$22,000 68,000 Year 2 70,000 × 0.20 = 14,000 36,000 54,000 Year 3 90,000 × 0.20 = 18,000 54,000 36,000 Year 4 80,000 × 0.20 = 16,000 70,000 20,000 Year 5 50,000 × 0.20 = 10,000 80,000 10,000...
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