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In fixed assets depreciation methods, what is "units of production depreciation method"? Also, is this method applicable easily?

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Question added by Mohammad Zaid abu odeh , Senior Accountant , Mega Food Industries And Products Exports L.L.C
Date Posted: 2015/05/12
Farzain Javed Anjum
by Farzain Javed Anjum , Senior Accountant/Acting Chief Accountant , Al Eatesam Modern Marketing Compnay

The units of production method of depreciation is based on an asset's usage, activity, or parts produced instead of the passage of time. Under the units of production method, depreciation during a given year will be very high when many units are produced, and it will be very low when only a few units are produced.

 

It is very difficult some time to obtain/estimate how many units a machine will produced over his entire life.

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