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Tatiana [17]
3 years ago
13

Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $48,400.

The machine's useful life is estimated at 10 years, or 394,000 units of product, with a $9,000 salvage value. During its second year, the machine produces 33,400 units of product.
Required:
Determine the machine's second-year depreciation using the units-of-production method.
Business
1 answer:
nasty-shy [4]3 years ago
4 0

Answer:

$3,340

Explanation:

Step 1  : Determine the Depreciation rate

<em>Depreciation rate = Cost - Salvage Value ÷ Estimated Units</em>

Depreciation rate = $0.10

Step 2 : Depreciation Expense

<em>Depreciation Expense = Depreciation rate x units produced</em>

Depreciation Expense = $3,340

Therefore,

the machine's second-year depreciation using the units-of-production method is $3,340

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