A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 475, 000 units of product during its life. It actually produces the following units: 220,000 in 1st year, 124,000 in 2nd year, 121,800 in 3rd year, 15,200 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.) Required: Prepare a table with the following column headings and compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method.
A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 475, 000 units of product during its life. It actually produces the following units: 220,000 in 1st year, 124,000 in 2nd year, 121,800 in 3rd year, 15,200 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted. (The machine must not be
Required:
Prepare a table with the following column headings and compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method.
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While I was learning from this exercies I tried to redo it but For DDB for the year 3, I found $32,188 instead of $32,187.50 and for the year 4 I found 16,094 instead of 12,187.50. On the Units-of-production, I found the right numbers for year 1 and 3 but my year 3 gave me 62,300 instead of 62,000 and the year 4 gave me 7600 instead of 4600. Can you help me with that please.
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