Question

A company purchased a rope-braiding machine for $190,000. The machine has a useful life of eight years and a residual value of $10,000. It is estimated that the machine could produce 750,000 units of climbing rope over its useful life. In the first year, 105,000 units were produced. In the second year, production increased to 109,000 units. Using the units-of-production method, what is the amount of depreciation that should be recorded for the second year?

Answer 1

$26,160

Step-by-step explanation:

109,000 units * [($190,000 - $10,000) / 750,000 units]

109,000 units * (180,000 / 750,000 units)

109,000 units * 0.24 = 26,160