A new machine costing $1,800,000 cash and estimated to have a $60,000 salvage value was purchased on January 1. The machine is expected to produce 600,000 units of product during its 8-year useful life. Calculate the depreciation expense in the first year under the following independent situations:1. The company uses the units-of-production method and the machine produces 70,000 units of product during its first year.2. The company uses the double-declining-balance method.3. The company uses the straight-line method.

What will be an ideal response?


1. ($1,800,000 ? $60,000)/600,000 units = $2.90/unit; 70,000 units * $2.90/unit = $203,000
2. $1,800,000 * 25% = $450,000
3. ($1,800,000 ? $60,000)/8 years = $217,500

Business

You might also like to view...

No matter which behavior style tendencies a customer demonstrates, everyone likes to feel appreciated.

Answer the following statement true (T) or false (F)

Business

In the object-oriented approach to systems design, a vendor is an example of an attribute

Indicate whether the statement is true or false

Business

The uniform-delivered pricing strategy means that goods sold are placed free on board a carrier with the customer paying the freight from the factory to the destination

Indicate whether the statement is true or false

Business

The probability distribution for the daily sales at Michael's Co. is given below. ? ? Daily Sales ($1,000s) Probability ? 40 0.2 ? 50 0.4 ? 60 0.3 ? 70 0.1 ? The expected daily sales are

A. $53,000. B. $55,000. C. $50,000. D. $60,000.

Business