Mohr Company Purchases a Machine at the Beginning of the Year

question 202

Multiple Choice

Mohr Company purchases a machine at the beginning of the year at a cost of $24,000. The machine is depreciated using the units-of-production method. The company estimates it will use the machine for 5 years, during which time it anticipates producing 40,000 units. The machine is estimated to have a $4,000 salvage value.
-The company produces 9,000 units in year 1 and 6,000 units in year 2. Depreciation expense in year 2 is:

• A) $3,000.
• B) $4,000.
• C) $9,600.
• D) $4,500.
• E) $14,400.

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Definitions:

Walling Off

The practice of segregating or isolating certain information or individuals within a firm to prevent conflicts of interest.

Conflict of Interest

A situation in which a person or entity has competing interests or loyalties that could potentially influence the objectivity of their decisions or actions.

Password Protection

A security measure where access to a device or digital resource requires entering a secret word or phrase.

Sole Beneficiary

The only person or entity designated to receive the benefits or assets from a will, trust, insurance policy, or other legal instrument.