When the unit of production method of depreciation is used, which of the following best describes depreciation expense?
A) Depreciation expense will vary directly with output.
B) Depreciation expense will vary directly with sales.
C) Depreciation rate per unit will vary directly with output.
D) Depreciation rate per unit will vary directly with sales.

Question

Quizplus · Accepted Answer

Depreciation expense under the unit of production method varies directly with the number of units produced or the output, as it is based on actual usage or production levels rather than time.

When the Unit of Production Method of Depreciation Is Used