Subject: Engineerings Economics Topics:1. Service Output MethodPlease help me to solve this in step by step manner. Make sure to analyze the question well.BOX your final answer Question: A television company purchased machinery for P130,000 on July 1, 1979. It is estimated to have a useful life of 10 years, a scrap value of P4,000, production of 400,000 units, and working hours of P130,000. The company used the machinery for P14,000 hours in 1979 and produced 35,000 units in 1979. Compute the depreciation for 1979 usingA) working hours methodB) output method. PS: PLEASE SEE THE EXAMPLES AND THE REFERENCES BELOW, MAKE SURE TO FOLLOW THE FORMULAS BELOW * Service-Output MethodIn this method, it is assumed that the total depreciation that has taken place is directlyproportional to the quantity of the output of the property up to that time.Let T = total units of output up to the end of lifeQ₁ = total number of units of output during the nth yeardepreciation per unit of output =d=(Co-C₂)T-Qn(Co-C₂)T 2. A television company purchased machinery for P100,000 on July 1, 1979. It is estimated that it willhave a useful life of 10 years; scrap value of P4,000, production of 400,000 units and working hoursof 120,000.The company uses the machinery for 14,000 hours in 1979 and 18,000 hours in 1980. The machineryproduces 36,000 units in 1979 and 44,000 units in 1980. Compute the depreciation for 1980 using (a)Straight line method (b) Working hours and (c) Output methodSolution:Co = P100,000CL = P4,000T = 400,000 units H = 120,000 hoursa. Straight line methodd₁0=Co-CL P100,000-P4,00010 yearsLb. Working hoursd10 =(Co-C₂Hc. Output methodReferences:H₁0=d₁0 = ( Co - C²) Q₁0 =TP9,600L = 10 years(P100,000 P4,000120,000 hoursP100,000 - P4,000400,000 unitsApply the formula for the solution of depreciationon the 10th year using straight line method,working hours method and output method.(18,000hours) = P14,400(44,000 units) = P10,560Blank, L. & Tarquin, A. (2018). Engineering Economy (8th Ed.). McGraw-Hill Education.Sullivan, W., Wicks, E. & Koelling, C. P. (2014). Engineering Economy (16th Ed.). Pearson Education SouthAsia Pte Ltd.Sta. Maria, H. (2000). Engineering Economy (3rd Ed.). National Book Store.Arreola, M. (1993). Engineering Economy (3rd Ed.). Ken Incorporated.

The Service Output Method of Depreciation is a depreciation method that results in the cost…

Answered: A television company purchased…

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Subject: Engineerings Economics
Topics:
1. Service Output Method

Please help me to solve this in step by step manner.
Make sure to analyze the question well.
BOX your final answer

Question:

A television company purchased machinery for P130,000 on July 1, 1979. It is estimated to have a useful life of 10 years, a scrap value of P4,000, production of 400,000 units, and working hours of P130,000. The company used the machinery for P14,000 hours in 1979 and produced 35,000 units in 1979. Compute the depreciation for 1979 using
A) working hours method
B) output method.

PS:
PLEASE SEE THE EXAMPLES AND THE REFERENCES BELOW, MAKE SURE TO FOLLOW THE FORMULAS BELOW

* Service-Output Method
In this method, it is assumed that the total depreciation that has taken place is directly
proportional to the quantity of the output of the property up to that time.
Let T = total units of output up to the end of life
Q₁ = total number of units of output during the nth year
depreciation per unit of output =
d=
(Co-C₂)
T
-Qn
(Co-C₂)
T

2. A television company purchased machinery for P100,000 on July 1, 1979. It is estimated that it will
have a useful life of 10 years; scrap value of P4,000, production of 400,000 units and working hours
of 120,000.
The company uses the machinery for 14,000 hours in 1979 and 18,000 hours in 1980. The machinery
produces 36,000 units in 1979 and 44,000 units in 1980. Compute the depreciation for 1980 using (a)
Straight line method (b) Working hours and (c) Output method
Solution:
Co = P100,000
CL = P4,000
T = 400,000 units H = 120,000 hours
a. Straight line method
d₁0
=
Co-CL P100,000-P4,000
10 years
L
b. Working hours
d10 =
(Co-C₂
H
c. Output method
References:
H₁0
=
d₁0 = ( Co - C²) Q₁0 =
T
P9,600
L = 10 years
(P100,000 P4,000
120,000 hours
P100,000 - P4,000
400,000 units
Apply the formula for the solution of depreciation
on the 10th year using straight line method,
working hours method and output method.
(18,000hours) = P14,400
(44,000 units) = P10,560
Blank, L. & Tarquin, A. (2018). Engineering Economy (8th Ed.). McGraw-Hill Education.
Sullivan, W., Wicks, E. & Koelling, C. P. (2014). Engineering Economy (16th Ed.). Pearson Education South
Asia Pte Ltd.
Sta. Maria, H. (2000). Engineering Economy (3rd Ed.). National Book Store.
Arreola, M. (1993). Engineering Economy (3rd Ed.). Ken Incorporated.

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