Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $43,500. The machine’s useful life is estimated at 10 years, or 385,000 units of product, with a $5,000 salvage value. During the first year , the machine produces 40,000 units of product and 32,500 units of the product in the second year.
Determine the machine’s first- and second-year depreciation using
a. The straight-line method