Chapter 10, Problem 10.5E

(a)

To determine

Depreciation: Depreciation refers to a method of accounting under which the value of a fixed asset is written off during the life of that particular asset.

Units-of-Activity Method: Under the units-of-activity method, the depreciation expense amount is calculated based on the units produced by the asset during the period.

To determine: Depreciable cost per unit under units-of-activity method.

(b)

To determine

To prepare: The depreciation schedule for given mileages for 2017, 2018, 2019, and 2020.

Given info:

Cost of bus is $148,000.

Actual mileage for 2017 is 26,000 miles.

Actual mileage for 2018 is 32,000 miles.

Actual mileage for 2019 is 25,000 miles.

Actual mileage for 2020 is 17,000 miles.

The depreciable cost per unit is $1.40 (calculated in part a).