Minor Company Installs a Machine in Its Factory at the Beginning

question 234

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

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