Question
A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Companys factory on January 1. The factory
A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Companys factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the following units: 220,000 in 1st year, 124,600 in 2nd year, 121,800 in 3rd year, 15,200 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimatethis 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.) ine Depreciation Depreciation Expense Year 110,000 62.300 60,900 7,600 240,800 Total Units of Production Depreciable Depreciation Depreciation per unit Year Units Expense 4 Total DDB Depreciation for the Period End of Period Beginning of Depreciation Depreciation Accumulated Expense Year Period Book Book Value Value Rate Depreciation 4 TotalStep by Step Solution
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