A company purchased a rope-braiding machine for $190,000.The machine has a useful life of eight years and a residual value of $10,000.It is estimated that the machine could produce 750,000 units of climbing rope over its useful life.In the first year,105,000 units were produced.In the second year,production increased to 109,000 units.Using the units-of-production method,what is the amount of depreciation that should be recorded for the second year?
A)$25,200
B)$26,160
C)$26,660
D)$27,613
E)$53,160

Question

Quizplus · Accepted Answer

The units-of-production method calculates depreciation based on actual usage. The depreciation per unit is ($190,000 - $10,000) / 750,000 = $0.24 per unit. For the second year, depreciation is 109,000 units * $0.24 = $26,160.

A Company Purchased a Rope-Braiding Machine for $190,000