If you produced 2,000 units in one year, then the depreciation expense for that year, using the units of production method, would be $20,000 and the book value of the asset is reduced to $80,000.

The unit of production method for calculating depreciation considers an asset’s practical usage in the production process rather than considering its time in use.; This method is particularly ...

With the units-of-production depreciation method, the amount of depreciation recorded each period depends on how much the business used the asset. Accumulated depreciation is the cumulative, or ...