A machine costing $215,000 with a four-year life and an estimated $19,000 salvag

Question

A machine costing $215,000 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 490,000 units of product during its life. It actually produces the following units: 121,500 in 1st year, 122,900 in 2nd year, 120,900 in 3rd year, 134,700 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.)

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each Straight-line depreciation.

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each Double-declining-balance.

Explanation / Answer

Unit of production dep :

Depreciation per unit = ( 215000-19000)/490000 = 0.40 per unit

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each Double-declining-balance.

Units of Production Year Depreciable Units Depreciation per unit Depreciation Expense 1 121500 0.40 48600 2 122900 0.40 49160 3 120900 0.40 48360 4 49880 Total 196000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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