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21%2Fconnect rnh d mheducation.com%2fpaamweb%2Findex htm1%23% http ://newconnect.mheducation.corn flow connect.html?seg truet returnUrl=http%3A secure CHAPTER 8 HOMEWORK 4 Required information The following informalion applies to the questions displayed below] Part 2 of 3 Ramirez Company installs a computcrized manufacturing machine in its factory at the beginning of the year at a cost of $85,400. The machine's useful life is estimated at 20 years, or 402,000 u During its second year, the machine produces 34,200 units of product. nits of product, with a $5,000 salvage value. 10 points Determine the machine's second-year depreciation using the units-of-production methood eBook Hin Print Choose Nu ouble the SL rate Depreciation expense per unit ar Annual Production (units) iation Expense 6

Explanation / Answer

Answer:

depreciation as per units of production method

=Cost -salvage value/total production during the life of machine

=85400-5000 / 402,000

=$0.2 depreciation per unit

Year

Annual
production in units

x

depreciation
rate per unit

=

depreciation
for 2nd year

Year-2

34200

x

0.2

=

6840

depreciation for 2nd year is =$6840

Year

Annual
production in units

x

depreciation
rate per unit

=

depreciation
for 2nd year

Year-2

34200

x

0.2

=

6840

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