Conversion of Depreciation Expenses of Machines in Cost Budget

If the machine is used for a long time, it will produce depreciation and depreciation expenses. How is this depreciation expense generally calculated?

The calculation formula of the depreciation cost of the machine:

Annual depreciation expense = (purchase cost-salvage value)/3

Monthly depreciation expense = annual depreciation expense/12

Let’s take a machine with 1.8W and a residual value of 6K as an example

Annual depreciation: (18000-6000)/3=4000 yuan

Monthly depreciation fee: 4000/12=333 yuan

Through calculation, we can conclude that the annual depreciation fee of this machine is 4K yuan, and the monthly depreciation fee is about 333 yuan.