A press has a dieset that has an estimated life of 500000 un

A press has a die-set that has an estimated life of 500,000 units. It has a first cost of $50,000 and a salvage amount of $3000. If 60,000 units are produced in a year, determine the annual depreciation expense of the die.

Solution

Solution:

Depreciation = Number of Units Produced/Life in Number of Units * (Cost Salvage Value)

=60,000/ 500,000 * (50,000 - 3000)

=5,640