Units Production Method of Depreciation

The video tutorial explains the units of production method for calculating depreciation. It involves two main steps: first, determining the depreciation rate per unit by dividing the depreciable base by the total expected units of production; second, applying this rate to the actual units produced each year to calculate annual depreciation expenses. The method ensures that depreciation aligns with asset usage, with the rate remaining constant throughout the asset's life.

Describe the process of calculating depreciation expenses for each year using the units produced.

What is the significance of the depreciation rate once it is calculated?