Question

Required information 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 $80,600. The machine's useful life is estimated at 10 years or 388.000 units of product, with a $3,000 salvage value. During its second year, the machine produces 32.800 units of product Determine the machine's second-year depreciation using the units of production method. Choose Numerator: Units of production Depreciation Choose Denominator - Annual Depreciation Expense Depreciation expense per unit Year Annual Production (units) Depreciation Expense

Answer 1

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Naming covention is not available, can be slightly different: Solution: Choose Numerator Unit of production Depreciation Choose Denominator Annual Depreciation Expense Dep Expense per unit $ 0.20 (Cost - residual value) $ 77,600 Year Annual production 2 32800 Estimated units of production 388000 Depreciation expense $ 6,560 (32800*0.20)