Units of production depreciation is a depreciation method that allows businesses to determine the value of an asset based upon usage. Common in manufacturing, it’s calculated by dividing the equipment’s net cost by its expected lifetime production. Multiplying this rate by the asset’s output for the year gives you the depreciation expense. You cannot use…
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Kathleen Murray is an author, journalist and content developer with more than 25 years experience. She is a seasoned editor and instructor with a background in business as a CPA. Kathleen in a graduate of Northwestern University and has been published in a variety of publications including The New York Times, Washington Post, Time, and CBS Moneywatch.