On January 1,2018,Tyson Manufacturing Corporation purchased a machine for $40,000,000.Tyson's management expects to use the machine for 33,000 hours over the next six years.The estimated residual value of the machine at the end of the sixth year is $47,000.The machine was used for 4000 hours in 2018 and 5500 hours in 2019.What is the depreciation expense for 2018 if the corporation uses the units-of-production method of depreciation? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

Depreciation per unit = (Cost - Residual value) / Useful life in units
Depreciation per unit = ($40,000,000 - $47,000) / 33,000 = $1210.70
Depreciation for the year 2018 = $1210.70 × 4000 hours = $4,842,800

On January 1,2018,Tyson Manufacturing Corporation Purchased a Machine for $40,000,000