A Machine with a Cost of $480000 Has an Estimated

question 290

Multiple Choice

A machine with a cost of $480000 has an estimated salvage value of $30000 and an estimated useful life of 5 years or 15000 hours. It is to be depreciated using the units-of-activity method of depreciation. What is the amount of depreciation for the second full year during which the machine was used 5000 hours?

• A) $150000
• B) $90000
• C) $130000
• D) $160000

---

Definitions:

Direct Materials Cost

The cost of raw materials that can be directly attributed to the production of a finished good.

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to specific products or activities based on their consumption of resources.

Direct Labor-Hours

The total hours worked by employees directly involved in the production of goods.

Direct Materials Cost

The cost of raw materials that are directly traceable to the production of a specific product.