Enter the cost, salvage value, and the total estimate units produced into the calculator to determine the units of production depreciation.

## Units of Production Deprecation Formula

The following formula is used to calculate the units of production depreciation.

UPD = ( C – SV ) / TP

- Where UPD is the units of production depreciation
- C is the cost basis of the asset
- SV is the salvage value of the asset
- TP is the total production of the asset over the lifespan

## FAQ

**What is units of production depreciation?**

Units of production depreciation is a measure of the expense of an asset per unit that it produces. In other words, how much cost per unit produced.

## Example

How to calculate units of production depreciation?

**First, determine the cost basis.**This is the total cost of the asset over it’s lifetime. For this example we will say this is $100,000.00.

**Next, determine the salvage value.**Determine the total salvage value of the asset after its useful life has expired. For this example we will say the material can be salvage for $1,000.00.

**Next, determine the units of production.**This is the total units the asset is expected to produce over it’s life. We will assume this value is 80 for this example.

**Finally, calculate the UPD.**We find the UPD to be ($100,000.00 – $1,000.00) / 80 = 1237.5 $/unit.

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