Homework Answers
answer: $5,000
Units of production = ( cost - residual value)/life in hours
= (120,000 - 20,000)/1,000,000
= 100,000/1,000,000
= 0.1
Given that machine is used for 50,000 hours in year 2
So, the the depreciation under units of production method for year 2 = 50,000 * 0.1
= $5000
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