The depreciation method that allocates an equal portion of the total depreciable cost for a plant asset to each unit produced is called:
A) Accelerated depreciation.
B) Modified accelerated cost recovery system (MACRS) depreciation.
C) Units-of-production depreciation.
D) Straight-line depreciation.
E) Declining-balance depreciation.

Question

Quizplus · Accepted Answer

Units-of-production depreciation method is used for assets that produce output, such as machinery or equipment. Under this method, the total depreciable cost is divided by the estimated number of units the asset will produce over its useful life, and then depreciation is charged based on the number of units produced each year. This method is ideal for assets that do not depreciate evenly over time, and allows businesses to accurately calculate the depreciation expense based on the actual usage of the asset.

The Depreciation Method That Allocates an Equal Portion of the Total