On January 1,2018,Tyson Manufacturing Corporation Purchased a Machine for $40,000,000

question 21

Multiple Choice

On January 1,2018,Tyson Manufacturing Corporation purchased a machine for $40,000,000.Tyson's management expects to use the machine for 33,000 hours over the next six years.The estimated residual value of the machine at the end of the sixth year is $47,000.The machine was used for 4000 hours in 2018 and 5500 hours in 2019.What is the depreciation expense for 2018 if the corporation uses the units-of-production method of depreciation? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

• A) $4,842,800
• B) $13,333,333
• C) $6,658,850
• D) $4,848,480

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Definitions:

Absorption Costing

A financial strategy that absorbs all the manufacturing outlays, encompassing direct materials, workforce costs, alongside both adaptable and unchanging manufacturing overheads, into the cost of a product.

Unit Product Cost

The cost allocated to a single unit of product, encompassing direct materials, direct labor, and allocated overhead costs.

Income Statement

A financial report outlining the revenues, expenses, and profits or losses of a company over a specific period.

Fixed Manufacturing Overhead

Costs associated with production that do not change with the level of output, such as rent for factory facilities or salaries of permanent staff.