Question

Exercise 8-5 Units-of-production depreciation LO P1 Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $52,500. The machine's useful life is estimated at 5 years, or 415,000 units of product, with a $11,000 salvage value. During its second year, the machine produces 41,500 units of product. 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 2

Answer 1

Cost of the Machine 52500 Salvage Value 11000 Depreciable value of the Machine 41500 Units of Production Choose Numerator: Choose Denominator Annual Depreciation Expenses Depreciation Expenses Per unit 0.10 Cost minus Salvage 41500 Annual Depreciation in units 41500 Total Units of Prodcution 415000 Depreciation Expense 4150 Year / 2