Rosco Taxi Service uses the units-of-activity

Rosco Taxi Service uses the units-of-activity

Subject: Business    / Accounting
Question

Rosco Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 142,000 miles. Taxi no. 10 cost $32,000 and is expected to have a salvage value of $720. Taxi no. 10 is driven 35,500 miles in year 1 and 25,000 miles in year 2.

Calculate depreciation cost per mile using unit-of-activity method.

Depreciation cost __$___________________- per mile