Respuesta :
$2,654,241
Unit sales; Worst = 160 (1 - 0.09) = 145.6 units
Variable cost per unit; Worst = $12,000 (1 + 0.09) = $13,080
Fixed costs; Worst = $283,000 (1 + 0.09) = $308,470
OCF; Worst = [($24,000 - $13,080)(145.6) - $308,470][1 - 0.34] + 0.34($630,000/5) = $888,618.12
Unit sales; Worst = 160 (1 - 0.09) = 145.6 units
Variable cost per unit; Worst = $12,000 (1 + 0.09) = $13,080
Fixed costs; Worst = $283,000 (1 + 0.09) = $308,470
OCF; Worst = [($24,000 - $13,080)(145.6) - $308,470][1 - 0.34] + 0.34($630,000/5) = $888,618.12
$3,000 is the depreciation expense in year 2.
Further explanation:
Depreciation expense:
Depreciation expense refers to the fall in the value of an asset. There are three types of depreciation method which are:
1. Straight-line method
2. Diminishing method
3. Units of production method
Calculation of the depreciation expense in year 2:
Depreciation expense:
[tex]\begin{aligned} \text{Depreciation expense}&=\text{Estimated units in year 2}\:\times\:\text{Depreciation rate}\\&=6,000\:\text{units}\:\times\:\$0.5\:\text{per\:unit}\\&=\$3,000\end{aligned}[/tex]
Working note 1:
Calculate the value of depreciation rate:
[tex]\begin{aligned} \text{Depreciation rate}&=\dfrac{\text{Cost of machine}\:-\: \text{Residual value}} {\text{Number of units}} \\&=\dfrac{\$24,000 - \$4,000}{40,000\:\text{units}}\\&=\$\:0.5\:\text{units}\end{aligned}[/tex]
Thus,$3,000 is the depreciation expense in year 2.
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Answer details:
Grade: High School
Subject: Accounting
Chapter: Depreciation
Keywords: Mohr company purchases a machine at the beginning of the year at a cost of $24,000. 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 40,000 units. the machine is estimated to have a $4,000 salvage value. the company produces 9,000 units in year 1 and 6,000 units in year 2. depreciation expense in year 2 is, fall amount, asset, straight-line method, diminishing method, units-of-production method, asset, depreciation method, three types.
