Plastic Moulds purchased equipment on January 1, 2009 for $275,000. It was estimated that the equipment would have a residual value of $25,000 at the end of its useful life. The asset's useful life was estimated at 5 years or 10,000 units of output. The company has a December 31 year end. Additional information: Assuming the company uses the units-of-production depreciation method, what is the depreciation rate per unit for 2009?

Question

Plastic Moulds purchased equipment on January 1, 2009 for $275,000. It was estimated that the equipment would have a residual value of $25,000 at the end of its useful life. The asset's useful life was estimated at 5 years or 10,000 units of output. The company has a December 31 year end. Additional information:  Assuming the company uses the units-of-production depreciation method, what is the depreciation rate per unit for 2009?

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The Answer of Plastic Moulds purchased equipment on January 1, 2009 for $275,000. It was estimated that the equipment would have a residual value of $25,000 at the end of its useful life. The asset's useful life was estimated at 5 years or 10,000 units of output. The company has a December 31 year end. Additional information:  Assuming the company uses the units-of-production depreciation method, what is the depreciation rate per unit for 2009?

Plastic Moulds Purchased Equipment on January 1, 2009 for $275,000