A machine was purchased at an original cost of P3,250,114 with a salvage value of P386,985. The machine is expected to perform for 365,281 hours and can produce total units of 574,125. The machine has the following outputs: First year: H = 20,243 hours O= 45,754 units Second year: H = 19,854 hours O= 41,658 units Third year: H = 19,895 hours O= 42,036 units Fourth year: H = 17,856 hours O = 36,025 units Determine the following:

A machine was purchased at an original cost of P3,250,114 with a salvage value of P386,985. The machine is expected to perform for 365,281 hours and can produce total units of 574,125. The machine has the following outputs: First year: H = 20,243 hours O= 45,754 units Second year: H = 19,854 hours O= 41,658 units Third year: H = 19,895 hours O= 42,036 units Fourth year: H = 17,856 hours O = 36,025 units Determine the following:

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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Concept explainers

Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.

Question

Please provide detailed solution, not in excel 100% guarantee to vote it up. Thank you.

A machine was purchased at an original cost of P3,250,114 with a salvage value of
P386,985. The machine is expected to perform for 365,281 hours and can produce
total units of 574,125. The machine has the following outputs:
First year:
H = 20,243 hours
O = 45,754 units
Second year:
H = 19,854 hours
O = 41,658 units
Third year:
H = 19,895 hours
O= 42,036 units
Fourth year:
H = 17,856 hours
O = 36,025 units
Determine the following:

19. Book value at the end of four years using Service-Output Method.
20. Total depreciation at the end of 2nd year using Working-Hours Method.
21. Book value at the end of three years using Working-Hours Method.

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