If MARIO uses the units-of-production method, the amount of depreciation expense (in UYP) on MARIO’s income statement related to the manufacturing equipment is closest to:

A. 118,750.

B. 168,750.

C. 202,500.

Miguel Rodriguez of MARIO, S.A., an Uruguayan corporation, is computing the depreciation expense of a piece of manufacturing equipment for the fiscal year ended 31 December 2009. The equipment was acquired on 1 January 2009. Rodriguez gathers the following information (currency in Uruguayan pesos, UYP):

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Cost of the equipment Estimated residual value Expected useful life Total productive capacity Production in FY 2009 Expected production for the next 7 years UYP 1,200,000 UYP 200,000 8 years 800,000 units 135,000 units 95,000 units each year