Manufacturing Project Portfolio & Capex worked example

Capital Equipment Depreciation at 61% production allocation share: a worked example

This worked example runs the capital equipment depreciation numbers for a tougher week than the baseline: 61% production allocation share instead of the typical 85%. Estimate the depreciation expense your capital equipment fleet loads onto a manufacturing program over a year.

The inputs for this scenario

  • Depreciable asset count: 6 machines (held at the documented default)
  • Annual depreciation per machine: 42,000 $/machine-yr (held at the documented default)
  • Production allocation share: 61 % (the input this scenario stresses; the baseline uses 85)
  • Asset disposal and removal cost: 15,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Allocated depreciation = machines x annual charge per machine x allocation% + disposal adder.
  • Total capital equipment depreciation cost works out to 168,720 $ at these inputs, and this is the headline figure for the scenario.
  • Capital equipment depreciation cost per unit works out to 28,120 $ / piece at these inputs.
  • Variable capital equipment depreciation cost works out to 153,720 $ at these inputs.
  • Fixed capital equipment depreciation adder works out to 15,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where production allocation share sits at 85% and the headline result is 229,200 $, this scenario comes in 26.39% below the baseline at 168,720 $.
  • Use it when building machine-hour rates, evaluating a capex proposal, or reconciling fixed overhead against the asset register at fiscal year-end. A result at this level usually justifies acting on the stressed input before touching anything else, because every other figure in the table is downstream of it.

Results at a glance

  • Total capital equipment depreciation cost: 168,720 $ (headline result)
  • Capital equipment depreciation cost per unit: 28,120 $ / piece
  • Variable capital equipment depreciation cost: 153,720 $
  • Fixed capital equipment depreciation adder: 15,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Capital Equipment Depreciation calculator, set production allocation share to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.