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Mohr Company purchases a machine at the beginning of the year at a cost of $39,000. The machine is depreciated using the units-of-production method. The
Mohr Company purchases a machine at the beginning of the year at a cost of $39,000. The machine is depreciated using the units-of-production method. The company estimates it will use the machine for 5 years, during which time it anticipates producing 68,000 units. The machine is estimated to have a $5,000 salvage value. The company produces 10,500 units in year 1 and 7,500 units in year 2. Depreciation expense in year 2 is:
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$23,400.
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$3,750.
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$5,000.
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$6,800.
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$15,600.
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