On January 1, five years ago, Winkler and Dunnebier Machinery purchased an envelope machine for $1.5 million. The machine was given a useful life of 5 years or 40,000 hours. During the machines 5-year lifespan, its hourly usage was, respectively, 4000; 8000; 16000; 1000 and 2000 hours.

1) Using the units of production method, calculate the depreciation expense for the third year.