Reference no: EM133094961

Problem - A machine costing $212,600 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 484,000 units of product during its life. It actually produces the following units: 122,800 in Year 1, 123,800 in Year 2, 119,900 in Year 3, 127,500 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value.

Required -

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

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