E10-5 Younger Bus Lines uses the units-of-activity method in depreciating its buses. One bus

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E10-5 Younger Bus Lines uses the units-of-activity method in depreciating its buses. One bus

was purchased on January 1, 2008, at a cost of $168,000. Over its 4-year useful life, the bus is expected

to be driven 100,000 miles. Salvage value is expected to be $8,000.

Instructions

(a) Compute the depreciation cost per mile.

(b) Prepare a depreciation schedule assuming actual mileage was: 2008, 26,000; 2009, 32,000;

2010, 25,000; and 2011, 17,000.