Plastic Moulds purchased equipment on January 1,2015 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 2015?

Question

Plastic Moulds purchased equipment on January 1,2015 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 2015?

Quizplus · Accepted Answer

A)($275,000 - $25,000)/ 10,000 = $25.00 per unit

Plastic Moulds Purchased Equipment on January 1,2015 for $275,000