On January 1, 2018, Tyson Manufacturing Corporation purchased a machine for $40,000,000. Tyson's management expects to use the machine for 33,000 hours over the next six years. The estimated residual value of the machine at the end of the sixth year is $47,000. The machine was used for 4000 hours in 2018 and 5500 hours in 2019. What is the depreciation expense for 2018 if the corporation uses the units-of-production method of depreciation? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
A) $4,842,800
B) $13,333,333
C) $6,658,850
D) $4,848,480
A) $4,842,800
Explanation: Depreciation per unit = (Cost - Residual value) / Useful life in units
Depreciation per unit = ($40,000,000 - $47,000) / 33,000 = $1210.70
Depreciation for the year 2018 = $1210.70 × 4000 hours = $4,842,800
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