Q: Units of Activity

Orange Bus Lines uses the units-of-activity method in depreciating its buses. One bus was

purchased on January 1, 2014, at a cost of Rs.148,000. Over its 4-year useful life, the bus is

expected to be driven 100,000 miles. Salvage value is expected to be Rs.8,000.

Required:

(a) Compute the depreciable cost per unit.

(b) Prepare a depreciation schedule assuming actual mileage was 2014, 26,000; 2015, 32,000;

2016, 25,000; and 2017, 17,000.