Calculators > Financial > Depreciation > Units of Production Method

Units of Production Method Depreciation Calculator
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Production Depreciation Formulas

This calculator is for units of production method of depreciation of an asset or, the amount of depreciation for each unit and period. This calculation is equivalent to our units of activity depreciation calculator. The production method calculation results from 3 equations.  Depreciation per unit produced and depreciation for a period.

  1. Depreciable Cost = Original Cost - Salvage Value
  2. Depreciation per Unit = Depreciable Cost / Total Units
  3. Depreciation for Period = Depreciation per Unit x Number of Units Produced in a Period

Production Depreciation Example

The business purchased a bottle making machine for $322,600 and you expect it to produce 43,000 bottles over a life of 5 years with a salvage value at the end of 5 years of $10,000.   In a given period the machine produced 6,543 bottles.

  1. Depreciable Cost = $322,600 - $10,000 = $312,600
  2. Depreciation per Unit = $312,600 / 43,000 Units = $7.2698/unit (rounded to 4 decimal places)
  3. Depreciation for Period = $7.2698/ Unit x 6,543 Units = $47,566.30