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If a company uses the units of production method for depreciation, what factor i
If a company uses the units of production method for depreciation, what factor is primarily considered?
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If a company uses the units of production method for depreciation, what factor is primarily considered?
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The units of production method bases depreciation on the actual usage or production output of the asset.
Questions & Step-by-step Solutions
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Q
Q: If a company uses the units of production method for depreciation, what factor is primarily considered?
Solution:
The units of production method bases depreciation on the actual usage or production output of the asset.
Steps: 4
Show Steps
Step 1: Understand that depreciation is how a company spreads the cost of an asset over its useful life.
Step 2: Learn that the units of production method calculates depreciation based on how much the asset is used.
Step 3: Identify that the primary factor considered in this method is the actual output or usage of the asset.
Step 4: Realize that more usage means more depreciation expense, while less usage means less depreciation expense.
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