Calculate depreciation using the units of production method County Hospital purc

Question

Calculate depreciation using the units of production method County Hospital purchased a new x-ray machine at a cost of $400,000. They figured it would last 5 years or 100,000 x-rays and would be worth $100,000 at the end of the 5 years. The x-ray machine will take 15,000 x-rays the first year, 20,000 x-rays in the second year, 25,000 x-rays in the third year, 20,000 x-rays in the fourth year and 20,000 x-rays in the last year. Calculate the Units of Production depreciation for County Hospital's new x-ray machine for the second year.

Explanation / Answer

Depreciation/unit=(Cost-Residual value)/Useful life

=(400,000-100,000)/100,000=$3/unit

Hence depreciaiton for 2nd year=(3*20000)

=$60000

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.