On January 1, 2017, Zade Manufacturing Corporation purchased a machine for $41,000,000
Zade's management expects to use the machine for 33,000 hours over the next six years. The estimated residual value of the machine at the end of the sixth year is $44,000. The machine was used for 3,700 hours in 2017 and 5,900 hours in 2018. What is the depreciation expense for 2017 if the corporation uses the units-of-production method of depreciation? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
A) $4,592,033
B) $13,666,667
C) $7,322,431
D) $4,596,954
A .Depreciation per unit = (Cost - Residual value) / Useful life in units
Depreciation per unit = ($41,000,000 - $44,000 ) / $33,000 = $1,241.09
Depreciation for the year 2017 = $1,241.09 x 3,700 hours = $4,592,033
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