c) lower of cost and net realisable value d) replacement cost. Question 5: KLM Company acquired an item of plant with an expected useful life of 5 years. Expected total production output over this period was: Year 1,35 000 units Year 2,35 000 units Yeur 3,18 000 units Year 4, 12 000 units. The asset cost $100,000 and associated installation costs amounted to $20,000 and residual value is $5,000. The amount of depreciation charged in the first year is (use units of the production method for calculation): a) $40,250 b) S42,000 c) $35,000 d) 533,250