Activity Method Depreciation Calculator

Activity Depreciation
$
$
 
 
 
Answer:

Depreciation per Unit: $0.1120

Depreciation for Period: $1,868.16

Depreciable Base: $14,000.00

Calculator Use

Use this calculator to calculate depreciation based on level of activity for each period.  Activity, for example, can be cycles of a machine, miles driven on a car or the amount of time a piece of equipment is used.  This calculation is equivalent to our units of production depreciation calculator.

Inputs

Asset Cost
the original value of your asset or the depreciable cost; the necessary amount expended to get an asset ready for its intended use
Salvage Value
the value of the asset at the end of its useful life; also known as residual value or scrap value
Useful Units
the expected number of units that the asset will produce or last for its life (for example, miles, widgets, hours, etc.)
Units Used in Period
the number of units used in the period of time you want to calculate depreciation

Activity Depreciation

Formulas

The activity method calculation requires 2 equations.  Depreciation per unit and depreciation for a period.  The depreciable base is given as extra information.

  1. Depreciable Base = Asset Cost - Salvage Value
  2. Depreciation per Unit = Depreciable Base / Useful Units
  3. Depreciation for Period = Number of Units Used in a Period x Depreciation per Unit

Example

You purchase a car for your business for $22,000 and you expect it to have a life of 60,000 miles with a final salvage value of $2,000.

  1. Depreciable Base = 22,000 - 2,000 = $20,000
  2. Depreciation per Mile = $20,000 / 60,000 Miles = $0.333/ Mile
  3. Depreciation for Period = 17,000 Miles x $0.333/ Mile = $5661.00

Time Depreciation

Formulas

Similar to the activity depreciation, the time depreciation calculation results from 2 equations.  Depreciation per unit time and depreciation for a period based on total time the asset was used in that period.

  1. Depreciable Base = Asset Cost - Salvage Value
  2. Depreciation per Unit Time = Depreciable Base / Useful Time Units
  3. Depreciation for Period = Number of Time Units Used in a Period x Depreciation per Unit Time

Example

You purchase a construction vehicle for your business for $225,000 and you expect it to have a life of 15,000 hours with a salvage value of $5,000 after about 10 years.  In 1 specific period you used the vehicle for 1,475 hours.

  1. Depreciable Base = $225,000 - $5,000 = $220,000
  2. Depreciation per Hour Used = $220,000 / 15,000 Hours = $14.667/ Hour (rounded to 3 decimal places)
  3. Depreciation for Period = 1,475 Hours x $14.667/ Hour = $21,633.83
 

Cite this content, page or calculator as:

Furey, Edward "Activity Depreciation Calculator" From http://www.CalculatorSoup.com - Online Calculator Resource.