Units of Production Depreciation Method, also known as Units of Activity and Units of Usage Method of Depreciation, calculates depreciation on the basis of expected output or usage. For example, a machine may be depreciated on the basis of output produced during a period in proportion to its total expected production capacity. Therefore, useful life of an asset under Units of Production Method is stated in terms of production output or usage rather than years of service - See more at: http://accounting-simplified.com/financial/fixed-assets/depreciation-methods/units-of-production.html#sthash.nBQrq6uN.dpuf