What would have been the annual depreciation cost

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Reference no: EM131061582

The owner of a property is using the unit-of-production method for determining depreciation costs. The original value of the property is $55,000. It is estimated that this property can produce 5500 units before its value is reduced to zero: i.e., the depreciation cost per unit produced is $10. The property produces 100 units during the first year, and the production rate is doubled each year for the first 4 years. The production rate obtained in the fourth year is then held constant until the value of the property is paid off. What would have been the annual depreciation cost if the straight-line method based on time had been used?

Reference no: EM131061582

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