What Would Be the Depreciation Expense in Year 1,using Units-Of-Production,for

question 28

Multiple Choice

What would be the depreciation expense in year 1,using units-of-production,for a molding machine that cost $15,000,had a useful life of 5 years,no residual value,and an estimated total machine hours of 50,000? Production in year 1 was 10,000 hours.

• A)$3,000
• B)$4,000
• C)$6,000
• D)$5,000

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Definitions:

Manufacturing Overhead

All indirect costs related to the production process, including utilities, depreciation on equipment, and factory maintenance, not directly tied to specific units of output.

Schedule of Cost

A detailed report of the total costs involved in a project or the production of goods over a specific period.

Goods Manufactured

The total value of all products that have been completed during a specified period.

Overhead Rate

A calculation used to allocate indirect costs to produced goods, based on a specific base, such as labor hours.