Tinoy Corporation manufactures bath toys for toddlers. Tinoy has 3 machines it utilizes in the manufacturing process. Between 20X5 and 20X9 production volume has been consistent with each machine producing approximately the same production totals. The machines are depreciated using the service hours (SH) method. The depreciation expense for each machine between 20X5 and 20X9 can be seen in the graph below.

Tinoy Corporation Depreciation Expense for Three Machines 20x5–20x9

Required:

1. Interpret the graph, and present your conclusions, with an explanation, on the depreciation expense trend of each machine between 20X5 and 20X9.

2. Consider the number of hours that Machine 1 and Machine 2 were used between 20X5 and 20X9 and discuss the trend, given that production volumes remained the same during the period.

Transcribed Image Text:

Depreciation expense 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 2005 20x6 20x7 Year Depreciation expense Machine 1 Depreciation expense Machine 2 20x8 20x9 Depreciation expense Machine 3