Question

Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $84,200. The machine's useful life is estimated at 20 years, or 391,000 units of product, with a $6,000 salvage value. During its second year, the machine produces 33,100 units of product. Exercise 10-5 Units-of-production depreciation LO P1 Determine the machine's second-year depreciation using the units-of-production method. Choose Numerator: Units-of-production Depreciation 7 Choose Denominator: = = Annual Depreciation Expense Depreciation expense per unit Year Annual Production (units) Depreciation Expense 2

Answer 1

Answer

Choose Numerator	Choose Denominator	Annual Depreciation expense
(Cost - Salvage value)	Expected units of product	Depreciation expense per unit
$78,200	391000	$                                      0.20
Year	Annual Production	Depreciation expense
2	33100	$6,620