Chapter 10 e https/ 10 0 Saved Help 0 Required information The following informa

Question

Chapter 10 e https/ 10 0 Saved Help 0 Required information The following information applies to the questions displayed below of 3 Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of S43,500. The machine's useful life is estimated at 10 years, or 385,000 units of product, with a During its second year, the machine produces 32.500 units of product $5,000 salvage value Determine the machine's second-year depreciation using the units-of-production method Choose

Explanation / Answer

Unit of Production Depreciation: Depreciable cost   / Units of Production   = Depreciation expense per unit 38500     / 385000   = 0.10 per unit Year Annual Production (Units)   * Depreciation expense per unit = Annual Depreciation expense 2 32500 units     * 0.10 per unit   = 3250 Note: Depreciable cost: Cost of machine: 43500 Less: salvage Value 5000 Depreciable cost: 38500

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