Questions: Question 7 1 pts ABC Co has equipment that was purchased in 2023 costing 30,000. The equipment has no salvage value and a 100,000 mile useful life. ABC uses the units of production method of depreciation. What is the depreciation expense per mile? Question 8 1 pts ABC Co purchased a vehicle in 2023 costing 80,000. The equipment has no salvage value and a 200,000 mile useful life. ABC uses the units of production method of depreciation. In the first month of operation the vehicle is driven 2,500 miles. What is the depreciation expense for the month? Question 9 1 pts

Solution Steps

1. Question 7: To find the depreciation expense per mile, divide the total cost of the equipment by its useful life in miles. This will give the cost allocated to each mile driven.

2. Question 8: First, calculate the depreciation expense per mile using the total cost and useful life in miles. Then, multiply this per-mile expense by the number of miles driven in the first month to find the monthly depreciation expense.

For the equipment purchased by ABC Co costing \$30,000 with a useful life of 100,000 miles, the depreciation expense per mile is calculated as follows:

\[ \text{Depreciation per mile} = \frac{\text{Total Cost}}{\text{Useful Life in Miles}} = \frac{30000}{100000} = 0.3 \]

For the vehicle purchased by ABC Co costing \$80,000 with a useful life of 200,000 miles, the depreciation expense per mile is calculated as follows:

\[ \text{Depreciation per mile} = \frac{\text{Total Cost}}{\text{Useful Life in Miles}} = \frac{80000}{200000} = 0.4 \]

In the first month, the vehicle was driven 2,500 miles. The monthly depreciation expense is calculated by multiplying the depreciation per mile by the number of miles driven:

\[ \text{Monthly Depreciation Expense} = \text{Depreciation per mile} \times \text{Miles Driven} = 0.4 \times 2500 = 1000.0 \]

Final Answer