How is the depreciation expense calculated using the service quantity method?
A) Depreciation expense = Depreciable amount/Total quantity of productive service
B) Depreciation expense = (Depreciable amount/Total quantity of productive service)× Productive service for period
C) Depreciation expense = Depreciable amount/Productive service for period
D) Depreciation expense = Depreciable amount × Productive service for period

Question

Quizplus · Accepted Answer

The service quantity method calculates depreciation as a function of the total quantity of productive service that the fixed asset is expected to provide over its useful life. The depreciation expense is calculated by dividing the depreciable amount (cost of asset - estimated salvage value) by the total quantity of productive service and then multiplying that figure by the productive service for the period. Therefore, option B correctly represents the formula for calculating depreciation expenses using the service quantity method.

How Is the Depreciation Expense Calculated Using the Service Quantity