1. Units-of-Production Method
Depreciation
Per Unit =
Cost - Salvage Value
Total Units of Production
Step 1:
Step 2:
Depreciation
Expense =
Per Unit ×
Number of Units Produced in the Period

2. Units-of-Production Method
Assume that 7,000 units were inspected during Depreciation would be calculated as follows:
Depreciation
Per Unit =
Cost - Salvage Value
Total Units of Production
Step 1:
$9,000 36,000
= $0.25/unit
Step 2:
Depreciation
Expense =
Per Unit ×
Number of Units Produced in the Period
= $0.25 × 7,000 = $1,750
Step 2: Multiplying $0.25 per unit times the 7,000 units inspected results in $1,750 of depreciation for 2011.
Equipment
Accumulated Depr.
Depreciation expense
10,000
1,750

3. Units-of-Production Depreciation Schedule
Units produced and sold during the period.