The Digg Company. installs a manufacturing machine at its plant at the beginning of the year at a cost of $36,000. The life of the machine is estimated at 10 years, or 300,000 units of product, with a salvage value of $6,000. In its first year, the machine produced 14,000 units of the product. Determine the machine’s first-year depreciation expense using the units-of-production method.
Answer 1
Annual amortization (year 1) = $1,400 Explanation: Provide the following information: Purchase price = $36,000. Useful units = 300,000 units of product. Residual value = $6,000 In its first year, the machine produces 14,000 units of product. To calculate the depreciation expense for the first year using the units of production method, we need to use the following formula: Annual depreciation = [(original cost – salvage value)/useful life of production in units]*units produced Annual amortization= [(36,000 – 6,000)/300,000]*14,000 Annual depreciation = 0.1*14,000 = $1,400
answer 2
the answer to this question would be a shared investment
answer 3
c explanation: