Final answer:
The activity method of depreciation is also known as the Units of Production method. It differs from other methods by basing the depreciation expense on actual usage or production, not the passage of time. Other methods include Straight-line, Double Declining Balance, and Declining Balance methods.
Step-by-step explanation:
The activity method of depreciation is also known by another name which is the Units of Production method. This method of depreciation is different from others in that it is based on the actual usage or production level of the asset rather than on the passage of time. It allocates a fixed expense rate per unit of production or use, which means the depreciation charge changes based on the level of activity.
In contrast, the Straight-line method depreciates an asset by the same amount each year over its useful life, the Double Declining Balance method is an accelerated depreciation method which doubles the rate of depreciation of the straight-line method, and the Declining Balance method is another accelerated depreciation method that applies a constant rate to the reducing book value of an asset, thus delivering higher depreciation expenses in the early years of an asset's life.