00 Sprint 10:53 PM 72% ezto.mheducation.com A machine costing estimated $18,000

Question

00 Sprint 10:53 PM 72% ezto.mheducation.com A machine costing estimated $18,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 484,000 units of product during its life. It actually produces the following units: 122,800 in 1st year, 123,200 in 2nd year, 120,500 in 3rd year, 127,500 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.) 600 with a four-year life and an Required Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) Total Beginning e Expense

Explanation / Answer

Depreciation under unit’s production method is made using the following formulae:

=Number of units produced/Life in number of units*(Cost –salvage value)

For the year 1:

=122,800/494,000*(193,600)

= 48,125

For the year 2:

=123,200/494,000*(193,600)

= 48,282

For the year 3:

=120,500/494,000*(193,600)

= 47,224

For the year 4:

=127,500/494,000*(193,600)

= 49,968

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