Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $87,000.The machine's useful life is estimated to be 5 years,or 400,000 units of product,with a $7,000 salvage value.During its second year,the machine produces 84,500 units of product.Determine the machines' second year depreciation under the units-of-production method.
A)$16,900.
B)$16,000.
C)$17,400.
D)$18,379.
E)$20,880.

Question

Quizplus · Accepted Answer

Depreciation expense = (Cost - Salvage value) x Units produced / Total estimated units of production= ($87,000 - $7,000) x 84,500 units / 400,000 units= $16,900

Wickland Company Installs a Manufacturing Machine in Its Production Facility