A manufacturing company has purchased three assets:

The truck was depreciated by the units€of€production method. Usage of the truck was 22,000 miles and 25,000 miles during the first two years, respectively.
(a) Calculate the book depreciation for each asset for the first two years.
(b) If the lathe is to be depreciated over the early portion of its life by the DDB method and then by a switch to the SL method for the remainder of its life, when should the switch occur?

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Asset Type Item Truck Lathe Building Initial cost Book life MACRS class $25,000 200,000 miles 5 years $2,000 $800,000 $45,000 12 years 50 years 7 years $3,000 39 years $100,000 Salvage value Book depreciation Unit production (UP) SL DDB