When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is

Respuesta :

The most suitable depreciation method is the unit of output method.

What 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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