Question: A heavy construction firm has been awarded a contract to build a large concrete dam. It is expected that a total of 8 years will

A heavy construction firm has been awarded a contract to build a large concrete dam. It is expected that a total of 8 years will be required to complete the work. The firm will buy $600,000 worth of special equipment for the job. During the preparation of the job cost estimate, the following utilization schedule was computed for the special equipment:

                      Utilization                                           Utilization

Year                (hr/yr)              Year                            (hr/yr)

1                      6000                5                                  800

2                      4000                6                                  800

3                      4000                 7                                 2200

4                      1600                8                                  2200

At the end of the job, it is estimated that the equipment can be sold at auction for $60,000.

(a) Compute the sum-of-years-digits' depreciation schedule.

(b) Compute the unit-of-production depreciation schedule.

Step by Step Solution

3.43 Rating (162 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

a SOYD Depreciation N 8 SUM N2 N1 36 1 st Year SOYD ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

7-B-E-M (337).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Related Book