Galactic Bus Lines uses the units-of-activity method in depreciating its buses.

units-of-activity method. One bus was purchased on January 1, 2001, at a cost of $108,000. Over its 4-year useful

(SO 9) life, the bus is expected to be driven 100,000 miles. Salvage value is expected to be $8,000.

Instructions

(a) Compute the depreciation cost per unit.

(b) Prepare a depreciation schedule assuming actual mileage was: 2001, 26,000; 2002, 32,000; 2003, 25,000; and 2004, 17,000.