At December 31, 20X3, before recognizing any depreciation expense for 20X3, X Company has a machine with an original cost of $360,000 and accumulated depreciation of $90,000. The machine is used to manufacture a specific product and, at December 31, 20X3, has a remaining useful life of 7 years with no salvage value. The machine was used to produce 10,000 units in the current year, 20,000 units in previous years, and is expected to be used to produce an additional 50,000 units over its remaining life. If X Company uses the units of production method for calculating depreciation, depreciation expense in 20X3 will be (rounded) :

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Business

Elaina Riley

23 September, 07:51

At December 31, 20X3, before recognizing any depreciation expense for 20X3, X Company has a machine with an original cost of $360,000 and accumulated depreciation of $90,000. The machine is used to manufacture a specific product and, at December 31, 20X3, has a remaining useful life of 7 years with no salvage value. The machine was used to produce 10,000 units in the current year, 20,000 units in previous years, and is expected to be used to produce an additional 50,000 units over its remaining life. If X Company uses the units of production method for calculating depreciation, depreciation expense in 20X3 will be (rounded) :

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Alessandra · Answer 1

If X Company uses the units of production method for calculating depreciation, depreciation expense in 20X3 will be (rounded):

$45000

Explanation:

Cost 360000

Accum. Depre 90000

Usefull life 7

Produce 1 20000

Produce 2 10000

Produce 3 50000

80000

Deprec=cost/unit

Depre=360000/80000

Depre = 4,5

Produce 2012 20000 4,5 90000

Produce 2013 10000 4,5 45000

Produce rest 50000 4,5 225000

80000 4,5 360000