18) Determine the depreciation cost ($/equipment work hour). The equipment initial cost is $67,500 and an anticipated salvage value of the equipment is $2,000 and the useful life of the equipment is 6,000 working hours.
Depreciation cost per year = (original cost - salvage value)/useful life
a) 10.92
b) 11.34
c) 12.56
d) 13.05
Solution
Depreciation cost per year = (original cost - salvage value)/useful life
original cost = $67,500
salvage value= $2,000
useful life = 6,000 working hours
depreciation cost ($/equipment work hour) = (67500-2000)/6000 = $10.92
hance option a) is correct
.