Question
Compatibility Services acquired an $80,000 machine on January 1, 20X3. The machine is estimated to have a useful life of 8 years, and a residual
Compatibility Services acquired an $80,000 machine on January 1, 20X3. The machine is estimated to have a useful life of 8 years, and a residual value of $4,000. For units-of-production depreciation purposes, the machine is expected to produce 400,000 units. If Compatibility Services uses units-of-production depreciation and the company produces 40,000 units in 20X3; 60,000 units in 20X4; and 50,000 units in 20X5; what is the depreciation expense in 20X5?
A) $ 28,500
B) $12,000
C) $10,000
D) $9,500
E) $11,400
Note: Please show the math for the answer.
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