On June 30, 2011, Prego Equipment purchased a precision laser-guided steel punch that has an expected capacity of 300,000 units and no residual value. The cost of the machine was $450,000 and is to be depreciated using the units-of-production method. During the six months of 2011, 24,000 units of product were produced. At the beginning of 2012, engineers estimated that the machine can realistically be used to produce only another 230,000 units. During 2012, 70,000 units were produced.

Prego would report depreciation in 2012 of

A. $126,000.

B. $105,000.

C. $108,000.

D. $135,230.

Answer rating: 100% (QA)

A 126000 Capacity in Units 30000000 Cost of Machine 45000... View the full answer