Sunland Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 148,000 miles. Taxi no. 10 cost $38,000 and is expected to have a salvage value of $1,000. Taxi no. 10 is driven 28,500 miles in year 1 and 21,500 miles in year 2.

a. Calculate depreciation cost per mile using unit-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.)

Depreciation cost: $______ per mile

b. Compute the depreciation for each year. (Round answers to 0 decimal places, e.g. 125.)

Depreciation:

Year 1: $ ________

Year 2: $_________