The units-of-production method allocates varying amounts of depreciation each year based on an asset's usage.

Question

Quizplus · Accepted Answer

The units-of-production method calculates depreciation based on the number of units an asset produces or the number of hours it is used. This results in varying depreciation amounts each year, making it different from straight-line or declining balance methods that allocate equal amounts of depreciation each year.

The Units-Of-Production Method Allocates Varying Amounts of Depreciation Each Year