Question

Pearson Sig... Chapter 8 P... Pearson eText int-E... Solved: Ra... Solved: Ra... plems Saved Help Save & Exit Check m 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 $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. Determine the machine's second-year depreciation using the units-of-production method. Choose Numerator: Cost minus salvage $ 38,500 Year Annual Production (units) 2 Units-of-production Depreciation Choose Denominator: Total units of production S 385,000 Depreciation Expense 3,250 Annual Depreciation Expense Depreciation expense per unit 0.10

Answer 1

Solution

	Units of production Depreciation
	Numerator	/	Denominator	=	Annual depreciation expense
	Cost minus salvage	/	Total units of production	=	Depreciation expense per unit
	$      38,500.00	/	385000		$       0.10
Year	Annual production(units)		Depreciation expense
2	32500		$ 3,250.00