What would be the depreciation expense in year 1,using units-of-production,for a molding machine that cost $15,000,had a useful life of 5 years,no residual value,and an estimated total machine hours of 50,000? Production in year 1 was 10,000 hours.

Question

Quizplus · Accepted Answer

Depreciation expense = (Cost - Residual value) x (Actual machine hours / Estimated total machine hours)= (15,000 - 0) x (10,000 / 50,000)= 15,000 x 0.2= $3,000

What Would Be the Depreciation Expense in Year 1,using Units-Of-Production,for