The units of production method of depreciation:
A)allocates the cost of the long-lived asset based on an activity.
B)allocates an equal amount of plant asset cost to each accounting period.
C)is an accelerated method.
D)is used when an asset has no salvage value.

Question

Quizplus · Accepted Answer

The units of production method allocates the cost of a long-lived asset based on an activity or usage, such as the number of units produced or the hours used. This method is useful for assets that are used primarily in production and are more efficient in their early years of use.

The Units of Production Method of Depreciation