Ferdinand Quarry Limited acquired a chippings plant at a cost of GH50,000. It was estimated that the

Ferdinand Quarry Limited acquired a chippings plant at a cost of GHȼ50,000. It was estimated that the plant will produce 25,000 for its lifespan. The company total output of 5,000 and 6,500 tons respectively in the first two years into its operation. 

Required: 

(a) Calculate the deprecation charge for the first two using production hour rate.

(b) Explain the advantages of straight line depreciation over reducing balance depreciation.

Answer rating: 100% (QA)

a To calculate the depreciation charge for the first two years using the production hour rate method we need to determine the production hour rate per ... View the full answer