A heavy construction firm has been awarded a contract to build a large concrete dam. It is expected that a total of 8 years will be required to complete the work. The firm will buy $600,000 worth of special equipment for the job. During the preparation of the job cost estimate, the following utilization schedule was computed for the special equipment: Year Utilization (hr/yr)
1 6000
2 4000
3 4000
4 1600
5 800
6 800
7 2200
8 2200
At the end of the job, it is estimated that the equipment can be sold at auction for $60,000.
(a) Compute the sum-of-years-digits' depreciation schedule.
(b) Compute the unit-of-production depreciation schedule