Question

I am not understanding, where am I going wrong?

The following information applies to the questions displayed below) Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $43,500. The machine's useful life is estimated at 10 years, or 385,000 units of product, with a $5,000 salvage value. During its second year, the machine produces 32,500 units of product. Exercise 8-5 Units-of-production depreciation LO P1 Determine the machine's second year depreciation using the units of production method. Units of production Depreciation Choose Denominator: Choose Numerator: - - Annual Depreciation Expense Depreciation expense per unit Year Annual Production (units) Depreciation Expense of 12 Next > < Prev e O * E search

Answer 1

Unit of production Depreciation
	Choose numerator	/	Choose denominator	=	Depreciation expense per unit
	Cost minus salvage	/	Total unit of production	=	Depreciation expense per unit
	(43500-5000)	/	385000	=	0.10 per unit
Year	Annual production		Depreciation expense
2	32500		32500*.10 = 3250