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Units of Production

A form of depreciation that is most often slightly accelerated in form. It is used in manufacturing whereby the life of the asset is based on its engineered value of units it is expected to produce. Each year, the depreciation formula is the actual number of units produced divided by the total expected times the asset’s purchase value.

Fixed Costs – Explanation and Examples


‘Fixed costs’ is a business term used mostly in cost accounting.  It has several meanings based on its usage.  The most common definition associated with fixed costs is expenses that must be paid regardless of production or sales volume.  The [...]

Accelerated Depreciation – An Explanation


When it comes to depreciation, no two businesses are alike. Unlike traditional straight line depreciation where the asset value is cost out to depreciation expense in equal increments over a given life expectancy, accelerated depreciation expenses [...]