Ch8. Video 9 - Units-of-Production Method example

The video tutorial explains the units of production method for calculating depreciation. It covers the steps to determine the depreciation rate per unit and applies this rate to calculate yearly depreciation expenses. The tutorial emphasizes the importance of not exceeding the depreciable base and provides a detailed walkthrough of journal entries for each year. The session concludes with a brief mention of the declining balance method as the next topic.

What is the expected number of copies that Papa Company anticipates to produce in the first five years?

Explain the two steps required to calculate the depreciation rate per unit.

What is the formula used to find the depreciation rate?

Describe the significance of the depreciable base in the context of this production method.

What is the depreciation rate per copy calculated in the quiz?

How is the depreciation expense calculated for year one based on the number of copies produced?

What adjustment needs to be made in year five to ensure the accumulated depreciation does not exceed the depreciable base?