Question

the value of Die for screw driver is rupees 15,50,000 it can produce 1500000 screwdriver over its timeline and the residual value is expected to be rs 50000. if the company produces 50000 screwdrivers, what would be figure of depreciation?
a) 20,000
b) 30,000
C) 40,000
d) 50,000

Answer 1

Answer:

a] 20000

Explanation:

Answer 2

Given:

Value of Die =  Rs. 15,50,000

Production Capacity = 15,00,000 screwdrivers

Residual Value = Rs. 50,000

Screwdrivers produced = 50000

To Find:

Depreciation = ?

Solution:

Total Depreciation = Value of Die - Residual Value

Total Depreciation = 15,50,000 - 50,000 = 15,00,000

$Depreciation charged = \frac{Total Depreciation}{Production Capacity} *No. of Screwdrivers produced$

$Depreciation charged = \frac{15,00,000}{15,00,000} * 50,000$

Depreciation charged = 50,000

Hence, Option (d) is correct.