Question

Required information

[The following information applies to the questions displayed below.]
On January 1, 2021, the Allegheny Corporation purchased equipment for $150,000. The estimated service life of the equipment is 10 years and the estimated residual value is $18,000. The equipment is expected to produce 240,000 units during its life.
Required:
Calculate depreciation for 2021 and 2022 using each of the following methods.

3. Units of production (units produced in 2021, 50,000; units produced in 2022, 45,000). (Round "Depreciation per unit rate" answers to 2 decimal places.)

select formula for units of production depreciation:
calculate 2021 depreciation expense :
depreciation per unit rate	$ ????
units produced in 2021
depreciation in 2021	$ ???
calculate 2022 depreciation expense :
depreciation per unit	$ ????
units produced in 2022
depreciation in 2022	$ ????

Answer 1

Cost	150000
Less: Salvage value	18000
Depreciable cost	132000
Divide by Total units of production	240000
Depreciation per unit rate	0.55
3
(Cost - Salvage) / Total units of production
Calculate 2021 depreciation expense :
Depreciation per unit rate	0.55
Units produced in 2021	50000
Depreciation in 2021	27500
Calculate 2022 depreciation expense :
Depreciation per unit	0.55
Units produced in 2022	45000
Depreciation in 2022	24750