UNITS-OF-PRODUCTION DEPRECIATION Depreciation charge varies with amount of asset usage. Example: Equipment capitalized cost $17,000 10,000 units Estimated Life $2,000 Residual Value Depreciation Per Unit Cost Residual Useful Life in Units Year 1 1000 units produced Depreciation Book Value Year 2 3.000 units produced Depreciation Book Value Year 3 0 units produced Depreciation Book Value