The most suitable depreciation method is the unit of output method.
The unit of output method allocates depreciation expense based on the output of the machine in a particular year.
For example if a machine that costs 10,000 and has a salvage value of 1000 produces 100 output in year 1. The total output capacity of the machine is 1000.
Depreciation in year 1 = (100 / 1000) X (10,000 - 1000)
0.1 X 9000 = 900
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