A Company Purchased a Machine for $970,000

question 148

Multiple Choice

A company purchased a machine for $970,000.The machine has a useful life of 12 years and a residual value of $4,500.It is estimated that the machine could produce 1,000,000 units over its useful life.In the first year,200,000 units were produced.In the second year,production increased to 300,000 units.Using the units-of-production method,what is the book value of this asset at the end of the second year of operations?

• A)$482,750
• B)$487,250
• C)$485,000
• D)$291,000
• E)$289,650

---

Definitions:

Forced Division

The artificial separation of people or groups by imposed barriers or criteria, often with negative connotations.

Labor

Human effort, either physical or mental, expended in the production of goods and services.

Mechanical Solidarity

A concept developed by Émile Durkheim describing the social cohesion and integration that arises in societies with a simple division of labor, where individuals perform similar tasks.

Organic Solidarity

A concept developed by Émile Durkheim that refers to the social cohesion based upon the dependence individuals have on each other in more advanced societies.