UNITS OF PRODUCTION

Units of Production Depreciation Calculator

Spread cost minus salvage evenly across lifetime units, then charge the units produced this period.

Charge wear by output, not by calendar

Units of production, also called units of activity, is a US book method that spreads cost minus salvage evenly across the asset’s expected lifetime output—units, miles, or hours. Each period multiplies that per-unit rate by actual output. Straight-line spreads the same base by years. Sum-of-years’-digits and double-declining balance also follow time, with declining amounts. This page does not load MACRS percentages.

Depreciable base = cost − salvage
Depreciation per unit = depreciable base ÷ lifetime units
This period = per-unit rate × units this period
Book value = cost − per-unit rate × (units already depreciated + units this period)

Example

A $50,000 machine with $5,000 salvage and 100,000 expected units has a $0.45 rate per unit. Producing 20,000 units this period charges $9,000 and leaves a $41,000 book value. After a full 100,000 units, book value equals the $5,000 salvage.

What this schedule leaves out

Lifetime units must be positive. Units this period and units already depreciated must be non-negative and must not exceed remaining capacity. Partial-year conventions, Section 179, and IRS MACRS tables stay outside this usage identity. Idle periods charge $0.

Frequently asked questions

Is this MACRS?

No. MACRS uses IRS recovery periods and percentage tables. This page only spreads cost minus salvage across the units you enter.

How is this different from straight-line?

Straight-line charges the same dollar amount every year. Units of production charges more in high-output periods and nothing when the asset is idle.

What if output exceeds remaining life?

The page rejects the inputs. Lifetime capacity is a hard cap so book value does not fall below salvage.

Can units already depreciated be zero?

Yes. Then accumulated depreciation equals this period’s charge, and book value is cost minus that amount.

More calculators

Straight-Line Depreciation Calculator →Sum of Years’ Digits Depreciation Calculator →Double-Declining Balance Depreciation Calculator →

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