A machine costing $206,800 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 477,000 units of product during its life. It actually produces the following units: 122,700 in Year 1, 124,100 in Year 2, 120,500 in Year 3, 119,700 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. Note: Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.
A machine costing $206,800 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 477,000 units of product during its life. It actually produces the following units: 122,700 in Year 1, 124,100 in Year 2, 120,500 in Year 3, 119,700 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. Note: Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A machine costing $206,800 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company's factory on
January 1. The factory manager estimates the machine will produce 477,000 units of product during its life. It actually produces the
following units: 122,700 in Year 1, 124,100 in Year 2, 120,500 in Year 3, 119,700 in Year 4. The total number of units produced by the end
of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its
estimated salvage value.
Required:
Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method.
Note: Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.
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