Question

A machine costing $210,800 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 482,000 units of product during its life. It actually produces the following units: 121,600 in Year 1, 122,600 in Year 2, 120,500 in Year 3, 127,300 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. (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. please there are 3tabs to be completed 1-deprecation expense 2-units of production 3-deprecation for the period

Answer 1

The depreciation expense for each year, the units of production for each year, and the depreciation for the period are calculated using the straight-line and units-of-production methods.

Step-by-step explanation:

Depreciation Expense:

Year
Straight-line
Units-of-production
Declining-balance


Year 1
$37,700
$37,700
$63,932


Year 2
$37,700
$37,559
$38,340


Year 3
$37,700
$37,282
$23,341


Year 4
$37,700
$39,466
$10,246


Total
$150,800
N/A
N/A

Units of Production:

Year
Units Produced


Year 1
121,600


Year 2
122,600


Year 3
120,500


Year 4
127,300


Total
492,000

Depreciation for the Period:

Year
Straight-line
Units-of-production


Year 1
$37,700
$37,700


Year 2
$37,700
$37,559


Year 3
$37,700
$37,282


Year 4
$37,700
$39,466


Total
$150,800
N/A