Answer:
The depreciation expense for the year under units of production method is $ 132,000
Explanation:
Computation of depreciation expense under the units of production method
Total cost of equipment $ 850,000
Salvage value of equipment $ ( 14,000)
Depreciable basis $ 836,000
Estimated useful life in hours 38,000
Depreciation per hour of usage $ 836,000 / 38,000 $ 22 per hour used
Total usage during the year 6000 hours
Depreciation expense 6000 hours * $ 22 per hour $ 132,000
