Minor Company Installs a Machine in Its Factory at the Beginning

question 40

Multiple Choice

Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000.The machine's useful life is estimated to be 5 years,or 300,000 units of product,with a $15,000 salvage value.During its first year,the machine produces 64,500 units of product.Determine the machines' first year depreciation under the units-of-production method.

• A)$27,000.
• B)$54,000.
• C)$24,000.
• D)$25,800.
• E)$48,000.

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Definitions:

Single-speed

Refers to mechanisms or vehicles operating with only one gear ratio, without the ability to shift gears.

Two-speed

Describes a mechanism, such as a gearbox, with two operating speeds, allowing for a shift in performance or efficiency depending on the requirement.

Kingpin

A critical component in vehicle steering mechanisms or in the coupling between a trailer and a tractor, around which steering or pivoting occurs.

Steering Axles

Axles equipped with mechanisms to alter the direction of a vehicle's wheels, facilitating steering.