Ouyang Inc. acquired equipment for $100,000 with a 4-year useful life and $20,000 residual value in 20X3.
Question:
Ouyang Inc. acquired equipment for $100,000 with a 4-year useful life and $20,000 residual value in 20X3. The equipment can be used to produce 10,000 units in its whole life and produced 1,000 units during 20X3. Which of the following is true regarding the depreciation expense in 20X3?
Group of answer choices
Depreciation under units-of-production is $12,000 lower than that under straight-line depreciation.
Depreciation under units-of-production is $12,000 higher than that under straight-line depreciation.
Depreciation under units-of-production is the same as that under straight-line depreciation.
Depreciation under units-of-production is $10,000 lower than that under straight-line depreciation.
Depreciation under units-of-production is $10,000 higher than that under straight-line depreciation.
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman