Question
A machine costing $210,400 with a four-year life and an estimated $16,000 salvage value is installed in Luther Companys factory on January 1. The factory
A machine costing $210,400 with a four-year life and an estimated $16,000 salvage value is installed in Luther Companys factory on January 1. The factory manager estimates the machine will produce 486,000 units of product during its life. It actually produces the following units: 122,500 in Year 1, 122,700 in Year 2, 119,800 in Year 3, 131,000 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimatethis difference was not predicted.
a. Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Straight-line depreciation.
b. Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production
c. Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Double-declining-balance.
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