Question

The depreciation method that is best suited for a machine that is being used on an hourly basis will be ____________.

• A. depletion method
• B. double declining method
• C. declining method
• D. service hour method

Answer 1

The correct option is D service hour method

A machine which produces 'n' number of outputs on hourly basis is known from the beginning of its usage.However, with the passage of time, the output keeps reducing due to various reasons like wear and tear.

Depreciation on Service hourly method is the most beneficial method for such machines.