The depreciation method that allocates a varying amount of a plant asset's cost to expense for each period depending on its usage is called:
A)Accelerated depreciation.
B)Declining-balance depreciation.
C)Straight-line depreciation.
D)Units-of-production depreciation.
E)Modified accelerated cost recovery system (MACRS) depreciation.

Question

Quizplus · Accepted Answer

Units-of-production depreciation method allocates the cost of a plant asset based on its usage or output. The more the asset is used, the higher the amount of depreciation expense recognized. This method is commonly used for assets such as machinery, vehicles or equipment that directly produce goods or services, and where the wear and tear depends on the amount of usage.

The Depreciation Method That Allocates a Varying Amount of a Plant