On January 1, Year 1, Milton Manufacturing Company purchased equipment with a list price of $27,000. A total of $2000 was paid for installation and testing. During the first year, Milton paid $3000 for insurance on the equipment and another $600 for routine maintenance and repairs. Milton uses the units-of-production method of depreciation. Useful life is estimated at 100,000 units, and estimated salvage value is $4000. During Year 1, the equipment produced 14,000 units. What is the amount of depreciation for Year 1?
A. $4480
B. $4004
C. $3500
D. $3920
Answer: C
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What will be an ideal response?
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