Cordo Ltd. uses the units-of-production depreciation method. A new asset is purchased for $30,000 that will produce an estimated 90,000 units over its useful life. Estimated residual value is $3,000. What is the depreciable cost per unit?
A) $3.30
B) $3.00
C) $0.33
D) $0.30

Question

Quizplus · Accepted Answer

The depreciable cost per unit is calculated by subtracting the residual value from the purchase cost and then dividing by the total estimated units: ($30,000 - $3,000) / 90,000 units = $0.30 per unit.

Cordo Ltd Uses the Units-Of-Production Depreciation Method