raded Help Required intormation Use the following information for the Exercises

Question

raded Help Required intormation Use the following information for the Exercises below. [The following information applies to the questions displayed below) Ramirez Company installs a computerized manufacturing machine in ts factory at the beginning of the year at a cost cf $86,800. The machine's useful life is estimated at 20 years, or 404,000 units of product, with a $6,000 salvage value During its second year, the machine produces 34.400 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 Denominator: 1-1 Annual Depreciation Expense Year Annual Production (units Depreciation Expense

Explanation / Answer

CALCULATION OF THE DEPRECIATION PER UNIT Purchase Cost of Machine $                86,800.00 Less: Salvage Value $                  6,000.00 Net Value for Depreciation $                80,800.00 Expected to produce Miless 4,04,000 Units Depreciation per Miles = $                   0.20000 Per units ($ 80,800 / 404,000 Units) Depreciation For the Second Year Number of Units of Productuion 34,400 Units Depreciation Per Units $                   0.20000 Per Units Depreciation = (Unit Produced * Deprciation Per Units) $                  6,880.00 Answer = Depreciation = $ 6,880

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