Question

A copy machine was purchased for $35,000. it is estimated that the machine will have a useful life of 4 years with a residual value of $3,000. it is estimated that the machine will make 2,000,000 copies. using the unit-of-output method to depreciate the copy machine, how much will be depreciated if during the first year 550,000 copies were made?

Answer 1

First calculate cost per unit
Unit cost=(purchased cost-salvage value)÷ total units

Unit cost=(35,000−3,000)÷2,000,000
=0.016

Depreciated if during the first year 550,000 copies were made
0.016×550,000=8,800

Hope it helps!