On January 1, a Machine with a Useful Life of Five

question 153

Multiple Choice

On January 1, a machine with a useful life of five years and a salvage value of $25,000 was purchased for $125,000.What is the depreciation expense for year 2 under straight-line depreciation?

• A)$15,000
• B)$75,000
• C)$20,000
• D)$60,000

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Definitions:

Direct Labor

The wages or salaries paid to workers directly involved in the production of goods or services.

Machine Time

Refers to the amount of time a machine is used or available for use in the production of goods or services.

Base Material

The fundamental raw material or primary substance from which a product is made, often crucial to its production process.