A New Machine Is Expected to Produce 600,000 Units of Product

Question 171
Essay

A new machine is expected to produce 600,000 units of product during its 8-year useful life. The machine cost $1,800,000 cash and it is estimated to have a $60,000 residual value. 1. Calculate the depreciation if the machine produces 70,000 units of product during its first year, using the units-of-production method. 2. Calculate the depreciation on the machine using the double-declining-balance method. 3. Calculate the depreciation on the machine using the straight-line method.