Question

Original cost = Rs$7,50,000$. Installation charges = $1,00,000$, Salvage value = $50,000$. Depreciation for $3$rd year by units of production Method, if units produced in $3$rd year was $40,000$ and total estimated production $2,00,000$.

• A. Rs.$1,20,000$
• B. Rs.$1,80,000$
• C. Rs.$1,60,000$
• D. Rs.$2,00,000$

Answer 1

The correct option is C Rs.$1,60,000$

$7,50,000+1,00,000-50,000=8,00,000$
$8,00,000\times \frac{40,000}{2,00,000}=1,60,000$.