A machine costing $214,000 with a four-year life and an estimated $18,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 490,000 units of product during its life. It actually produces the following units: 122,400 in Year 1, 123,600 in Year 2, 121,000 in Year 3, 133,000 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. Note: Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar. Complete this question by entering your answers in the tabs below. Straight Line Units of Production Double declining balance Compute depreciation for each year (and total depreciation of all years combined) for the m depreciation. Straight-Line Depreciation Depreciation Year Expense Year 1 Year 2 Year 3 Year 4 Total $ 0

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 13E
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A machine costing $214,000 with a four-year life and an estimated $18,000 salvage
value is installed in Luther Company's factory on January 1. The factory manager
estimates the machine will produce 490,000 units of product during its life. It actually
produces the following units: 122,400 in Year 1, 123,600 in Year 2, 121,000 in Year 3,
133,000 in Year 4. The total number of units produced by the end of Year 4 exceeds
the original estimate-this difference was not predicted. Note: The machine cannot be
depreciated below its estimated salvage value.
Required:
Compute depreciation for each year (and total depreciation of all years combined) for
the machine under each depreciation method.
Note: Round your per unit depreciation to 2 decimal places. Round your answers to
the nearest whole dollar.
Complete this question by entering your answers in the tabs below.
Straight Line
Units of
Production
Double
declining
balance
Compute depreciation for each year (and total depreciation of all years combined) for the m
depreciation.
Straight-Line Depreciation
Depreciation
Year
Expense
Year 1
Year 2
Year 3
Year 4
Total
$
0
Transcribed Image Text:A machine costing $214,000 with a four-year life and an estimated $18,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 490,000 units of product during its life. It actually produces the following units: 122,400 in Year 1, 123,600 in Year 2, 121,000 in Year 3, 133,000 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. Note: Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar. Complete this question by entering your answers in the tabs below. Straight Line Units of Production Double declining balance Compute depreciation for each year (and total depreciation of all years combined) for the m depreciation. Straight-Line Depreciation Depreciation Year Expense Year 1 Year 2 Year 3 Year 4 Total $ 0
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