[dlsylvia]

$26,000 company car is expected to be driven for 120,000 miles and then salvaged for $3,500. Find the unit depreciation using the units-of-production method.

[pready]

For units of production you need to know how many miles total the vehicle will be driven in its useful life.

you take the cost less the salvage value and divide it by the total miles to get the depreciation cost per mile.

Then when you have your mileage driven for the accounting period you take that mileage times your deprecian cost per mile to get your deprecian expense for the accounting period.