Question

A machine costing $213,200 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 493,000 units of product during its life. It actually produces the following units: 122,600 in Year 1, 122,500 in Year 2, 120,100 in Year 3, 137,800 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted. (The machine cannot be depreciated below its estimated salvage value.)

Required:

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.)

Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Straight-line depreciation.

	Straight-Line Depreciation Year Depreciation Expense 1 2 3 4 Total $0

Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production.

	Units of Production Year Units Depreciable Units Depreciation per unit Depreciation Expense 1 122,600 2 122,500 3 120,100 4 137,800 Total $0

Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Double-declining-balance.

	DDB Depreciation for the Period End of Period Year Beginning of Period Book Value Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value 1 % $0 2 % 0 3 % 0 4 % 0 Total $0

Answer 1