Question

A manufacturing company incurs depreciation costs of $6,000 per month on manufacturing machinery. The depreciation cost per unit is $ when the company manufactures 2,000 units.

Answer 1

The depreciation cost per unit is $3.

What is the depreciation cost per unit?

Depreciation is the process used to expense the cost of an asset. Depreciation is the reduction of the carrying value of an asset. Depreciation occurs as a result of the wear and tear of an asset.

The depreciation cost per unit can be determined by dividing the total deprecation by the units manufactured by the company.

The depreciation cost per unit = depreciation cost / units manufactured

$6000 / 2000 = $3

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