Agazzi Company purchased equipment for $304,000 on October 1, 2016. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $16,000. Estimated production is 40,000 units and estimated working hours are 20,000. During 2016, the equipment produces 1,000 units.

Compute depreciation expense under each of the following methods. Agazzi is on a calendar-year basis ending December 31.

1. Straight-line method for 2016.

Can you please solve the problem and explain each process step by step ?