Units of Production Depreciation Method

Companies use which of the following methods of activity approach to compute depletion?

Unit of production method

Where the other depreciation methods are time-based,

units of productivity

method is the method to use on expensive manufacturing assets.

units of productivity

XYZ Corporation purchased a piece of manufacturing machinery for $1,000,000. It is estimated that the asset will produce 500,000 units during its useful life, and the salvage value is $40,000. If the unit produces 55,000 units in the second year, what is the second year of depreciation expense, using the units of production depreciation method? $

105,600

XYZ Corporation purchased a piece of manufacturing machinery for $750,000. It is estimated that the asset will produce 350,000 units during its useful life, and the salvage value is $27,000. If the unit produces 52,000 units in the second year, what is the second year of depreciation expense, using the units of production depreciation method?

107,640

XYZ Corporation purchased a piece of manufacturing machinery for $1,000,000. It is estimated that the asset will produce 500,000 units during its useful life, and the salvage value is $40,000. If the unit produces 60,000 units in the first year, what is the first year of depreciation expense, using the units of production depreciation method? $

115,200

XYZ Corporation purchased a piece of manufacturing machinery, for $750,000. It is estimated that the asset will produce 350,000 units during its useful life, and the salvage value is $27,000. If the unit produces 45,000 units in the first year, what is the depreciable base of the asset, using the units of production depreciation method? $

723000

XYZ Corporation purchased a piece of manufacturing machinery, for $750,000. It is estimated that the asset will produce 350,000 units during its useful life, and the salvage value is $27,000. If the unit produces 45,000 units in the first year, what is the depreciable base of the asset, using the units of production depreciation method? $733,300723,000733,003723,333

723000

XYZ Corporation purchased a piece of manufacturing machinery for $750,000. It is estimated that the asset will produce 350,000 units during its useful life, and the salvage value is $27,000. If the unit produces 45,000 units in the first year, what is the first year of depreciation expense, using the units of production depreciation method?

93,150

XYZ Corporation purchased a piece of manufacturing machinery for $1,000,000. It is estimated that the asset will produce 500,000 units during its useful life, and the salvage value is $40,000. If the unit produces 55,000 units in the second year, what is the depreciable base of the asset, using the units of production depreciation method? $

960,000

XYZ Corporation purchased a piece of manufacturing machinery for $1,000,000. It is estimated that the asset will produce 500,000 units during its useful life, and the salvage value is $40,000. If the unit produces 55,000 units in the second year, what is the depreciable base of the asset, using the units of production depreciation method? $960,000900,600900,900960,606

960000

Using the units of production method, if an asset is not used, you will take $

0

Which of the following best describes depletion?

A function of the number of units extracted during the period

Which of the following is another name for the unit of production method?

Activity method

The unit of productivity method best matches the asset's

Answer 1: costs Answer 2: revenues

How do you compute depletion?

Cost per unit multiplied by the number of units extracted