Depreciation Cost when Straight Line Method is Assumed Solution

STEP 0: Pre-Calculation Summary
Formula Used
Depreciation = (Total Cost-Scrap Value)/Useful Life
D = (Tc-Sc)/n
This formula uses 4 Variables
Variables Used
Depreciation - Depreciation is an accounting method of allocating cost of tangible asset over useful life. Monetary value of asset decreases over time due to obsolescence. This decrease is measured as depreciation.
Total Cost - Total Cost refers to the cost of equipment at sight, which includes the unloading and loading charges etc.
Scrap Value - Scrap Value is the worth of a physical asset's individual components when the asset itself is deemed no longer usable.
Useful Life - (Measured in Year) - Useful Life is termed as an accounting estimate of the number of years it is likely to remain in service for the purpose of cost-effective revenue generation.
STEP 1: Convert Input(s) to Base Unit
Total Cost: 3500 --> No Conversion Required
Scrap Value: 350 --> No Conversion Required
Useful Life: 5 Year --> 5 Year No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
D = (Tc-Sc)/n --> (3500-350)/5
Evaluating ... ...
D = 630
STEP 3: Convert Result to Output's Unit
630 --> No Conversion Required
FINAL ANSWER
630 <-- Depreciation
(Calculation completed in 00.004 seconds)

Credits

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NSS College of Engineering (NSSCE), Palakkad
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11 Management of Construction Equipment Calculators

Average Investment if Salvage Value is not 0
Go Average Investment = (Salvage*(Useful Life-1)+Capital Cost*(Useful Life+1))/(2*Useful Life)
Horsepower given Quantity of Oil
Go Engine power = (Quantity of Oil-(Crankcase Capacity/(5*Time between Change of Oil)))*(0.74/(0.0027*Operating Factor))
Quantity of Lubricating Oil
Go Quantity of Oil = (Engine power*Operating Factor*0.0027/0.74)+(Crankcase Capacity/(5*Time between Change of Oil))
Capacity of Crankcase when Quantity of Oil is Determined
Go Crankcase Capacity = 5*Time between Change of Oil*(Quantity of Oil-(Engine power*Operating Factor*0.0027/0.74))
Average Investment when Salvage value is 0
Go Average Investment = ((1+Useful Life)/(2*Useful Life))*Capital Cost
Capital Cost when Salvage Value is 0
Go Capital Cost = (2*Useful Life*Average Investment)/(1+Useful Life)
Depreciation Cost when Straight Line Method is Assumed
Go Depreciation = (Total Cost-Scrap Value)/Useful Life
Book Value for New Machine
Go Book Value = (Hourly Depreciation*Life Span)/0.9
Life Span of Machine
Go Life Span = 0.9*Book Value/Hourly Depreciation
Hourly Depreciation
Go Hourly Depreciation = 0.9*Book Value/Life Span
Hourly Cost Worker
Go Hourly Cost = 12*Monthly Salary/Machine Hours

Depreciation Cost when Straight Line Method is Assumed Formula

Depreciation = (Total Cost-Scrap Value)/Useful Life
D = (Tc-Sc)/n

What are the factors affecting the Cost of Owning and Operating the Construction Equipment?

The different major costs contributing to the cost of owning and operating construction equipment are as follows:
1. Depreciation Cost
2. Investment Cost
3. Maintenance and Repair Cost
4. Operation Costs
a. Repair charges
b. Depreciation on tyres and tubes
c. Labour charges
d. Fuel charges
e. Operation and maintenance crew charges
f. Miscellaneous supplies
5. Downtime Cost
6. Obsolescence Cost
7. Replacement Cost

What is Down Time Cost?

Down time is called as a time where the machine does not work due to some repair or adjustments. Down time tends to increase with usage. It denotes the availability of an equipment for actual production and hence can be used to find the productivity of an equipment. Reduced productivity means high unit cost of production.

How to Calculate Depreciation Cost when Straight Line Method is Assumed?

Depreciation Cost when Straight Line Method is Assumed calculator uses Depreciation = (Total Cost-Scrap Value)/Useful Life to calculate the Depreciation, The Depreciation Cost when Straight Line Method is Assumed formula is defined as the value of a fixed asset minus all of the accumulated depreciation that has been recorded against it. Depreciation is denoted by D symbol.

How to calculate Depreciation Cost when Straight Line Method is Assumed using this online calculator? To use this online calculator for Depreciation Cost when Straight Line Method is Assumed, enter Total Cost (Tc), Scrap Value (Sc) & Useful Life (n) and hit the calculate button. Here is how the Depreciation Cost when Straight Line Method is Assumed calculation can be explained with given input values -> 630 = (3500-350)/157784760.

FAQ

What is Depreciation Cost when Straight Line Method is Assumed?
The Depreciation Cost when Straight Line Method is Assumed formula is defined as the value of a fixed asset minus all of the accumulated depreciation that has been recorded against it and is represented as D = (Tc-Sc)/n or Depreciation = (Total Cost-Scrap Value)/Useful Life. Total Cost refers to the cost of equipment at sight, which includes the unloading and loading charges etc, Scrap Value is the worth of a physical asset's individual components when the asset itself is deemed no longer usable & Useful Life is termed as an accounting estimate of the number of years it is likely to remain in service for the purpose of cost-effective revenue generation.
How to calculate Depreciation Cost when Straight Line Method is Assumed?
The Depreciation Cost when Straight Line Method is Assumed formula is defined as the value of a fixed asset minus all of the accumulated depreciation that has been recorded against it is calculated using Depreciation = (Total Cost-Scrap Value)/Useful Life. To calculate Depreciation Cost when Straight Line Method is Assumed, you need Total Cost (Tc), Scrap Value (Sc) & Useful Life (n). With our tool, you need to enter the respective value for Total Cost, Scrap Value & Useful Life and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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