### Units-of-activity method in depreciating

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##### Reference no: EM13258322

Blue Highway Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2007,at a cost of \$120,000. Over its 4-year useful life, the bus is expected to be driven 160,000 miles. Salvage value is expected tobe \$8,000.

Compute the depreciation cost per unit.

Prepare a depreciation schedule assuming actual mileage was:2007, 40,000; 2008, 52,000; 2009, 41,000; and 2010, 27,000.

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