You have been asked to consider the following situations.

Case A The company purchased a machine for $25,000 cash. The machine will probably have a useful life of 10 years but it has a component part that will need to be replaced every two and a half years. The cost to replace this part is $250.

Case B The company purchased a second machine for $20,000 cash. The machine will probably have a useful life of 10 years but it has a component part that will need to be replaced every two years. The cost to replace this part is $4,000.

Case C The company purchased a third machine for $50,000 cash. The machine will probably have a useful life of 10 years as long as it is given a major overhaul every three years; the overhaul will cost $12,500.

Required:

In each of the three cases, assess the need to apply component depreciation to the machine. That is, is the machine one asset, or should it be segregated into components, with each component depreciated separately?