mohr company purchases a machine at the beginning of the year at a cost of $48,000. 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 86,000 units. the machine is estimated to have a $5,000 salvage value. the company produces 11,000 units in year 1 and 8,000 units in year 2. depreciation expense in year 2 is:

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04-11-2022
Business

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mohr company purchases a machine at the beginning of the year at a cost of $48,000. 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 86,000 units. the machine is estimated to have a $5,000 salvage value. the company produces 11,000 units in year 1 and 8,000 units in year 2. depreciation expense in year 2 is:

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Parrain Parrain · Answer 1 · 2022-11-07T12:27:16-05:00

The depreciation expense to the machine that Mohr Company purchased, in year 2, based on the cost of the machine and the units of production method is $4, 000

How to find the depreciation expense?

When using the units-of-production method to find depreciation, the focus would be on the amount of products that a machine or equipment was able to produce in a year, and then comparing this to the total amount of units the machine was to produce over its lifetime.

Firstly, there is a need to find the useful value of the machine by the formula:

= Cost of machine- Salvage value

= 48, 000 - 5, 000

= $43, 000

The depreciation expense in year 2 would then be:

= Number of units produced in year 2 / Total number of units expected over lifetime x Useful value of machine

= 8, 000 / 86, 000 x 43, 000

= $4, 000

Find out more on the units-of-production method at https://brainly.com/question/15731283

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