Depreciation

Written by Jerry Ratzlaff on . Posted in Manufacturing Engineering

Depreciation, abbreviated as Dep, is the process of deducting the cost of a business asset over a long perion of time.

 

Depreciation - Straight-Line Method Formula

\(\large{ Dep =  \frac{ AC \;-\; RV }{ ULA }   }\)  

Where:

\(\large{ Dep }\) = depreciation

\(\large{ AC }\) = asset cost

\(\large{ RV }\) = residual value

\(\large{ ULA }\) = useful life of asset

 

Depreciation - Unit of Production Method Formula

\(\large{ Dep =  \frac{ AC \;-\; RV }{ ULA } \; UP  }\)  

Where:

\(\large{ Dep }\) = depreciation

\(\large{ AC }\) = asset cost

\(\large{ RV }\) = residual value

\(\large{ LTP }\) = life-time production

\(\large{ UP }\) = units produced

 

Depreciation - Double Declining Balance Method Formula

\(\large{ Dep =  \frac{ AC \;-\; AD }{ ULA }   }\)  

Where:

\(\large{ Dep }\) = depreciation

\(\large{ AC }\) = asset cost

\(\large{ AD }\) = accumulated depreciation

\(\large{ ULA }\) = useful life of asset

 

Tags: Equations for Manufacturing