Vickers Company use the units-of-production method in computing depreciation expense. A new plant asset is purchased for $18,000 that will produce an estimated 100,000 units over its useful life. Estimated residual value at the end of its useful life is $2,000. What is the depreciation cost per unit?
A) $0.16.
B) $1.80.
C) $1.60.
D) $0.18.

Question

Quizplus · Accepted Answer

The depreciation expense per unit of production is: $18,000 - $2,000 = $16,000/100,000 = $0.16 per unit.

Vickers Company Use the Units-Of-Production Method in Computing Depreciation Expense