A company purchased a weaving machine for $190,000.The machine has a useful life of 8 years and a residual value of $10,000.It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life.In the first year,15,000 bolts were produced.In the second year,production increased to 19,000 units.Using the units-of-production method,what is the amount of accumulated depreciation at the end of the second year?
A)$48,133.
B)$45,600.
C)$86,133.
D)$23,750.
E)$81,600.

Question

Quizplus · Accepted Answer

The units-of-production depreciation method calculates depreciation based on actual usage. The depreciation per unit is ($190,000 - $10,000) / 75,000 = $2.40 per bolt. For the first year: 15,000 bolts * $2.40 = $36,000. For the second year: 19,000 bolts * $2.40 = $45,600. Accumulated depreciation at the end of the second year is $36,000 + $45,600 = $81,600.

A Company Purchased a Weaving Machine for $190,000