Depreciation for the year using units-of-production method

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Reference no: EM13802472

1. If your taxable income is $100,000 and state tax rate is 6% and federal tax rate is 34%, how much federal tax do you owe?

a) $37,960

b) $34,000

c) $40,000

d) $31,960

2. A truck has a cost basis of $70,000. It has a total life of 150,000 miles with a $10,000 salvage value. You drove 50,000 miles in the past year. What is the allowable depreciation for the year using the units-of-production method?

a) $20,000

b) $19,000

c) $21,000

d) $22,000

3. You are considering the purchase of a new machine that will produce your product for 3.45 a unit. Currently, it costs you $3.58 to make a unit. If you plan to make 20,000 units total of this product this year (and then never make the product again), what is the Maximum you could pay for the machine to break even on the purchase?

a) $2,360

b) $2,450

c) $2,600

d) Not enough information to determine

Reference no: EM13802472

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