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a machine has cost 166200 and scrape of 5000.output from machine is estimated to be 124000 in 6 years.15% of total output is used in each of the years 1,2,3 with 20% of total in years 4 and 5.what is depreciation in year 4?
Presumably with all that data they expect depreciation to be charged on the basis of units made, though there is nothing to stop the company using a simple straight line approach over the 6 year life.
The machine is to be depreciated from 166200 down to 5000 over estimated total production of 124000 units.
So work out the depreciation per unit then calculate the depreciation for Year 4 production volume.
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