Depreciation
This query is : Resolved
15 May 2013
Dear sir,
Why can't we show Depreciation under Direct expenses i.e Depreciation on Factory Building , Depreciation on plant and Machinery
Why we will show under Indirect exp?
Please Clarify
Why can't we show Depreciation under Direct expenses i.e Depreciation on Factory Building , Depreciation on plant and Machinery
Why we will show under Indirect exp?
Please Clarify
Aditya KHaitan
(Expert)
16 May 2013
See,
Direct cost should have a direct relation with the product and can be directly allocated to the final Product.
Similarly other overhead expenses not covered is indirect expenses which are ancillary.
based on this definition it is clear , Depreciation is indirect and Fixed and should not be covered under direct.
Can you determine the actual wear and tear of Truck engine in 10000 kilometer Run .
Can you determine the depreciation to shed in storage of 10000 tonne of Steel or 11000 tonne of steel or 11001 tonne of steel .
I believe I satisfy your query.
Direct cost should have a direct relation with the product and can be directly allocated to the final Product.
Similarly other overhead expenses not covered is indirect expenses which are ancillary.
based on this definition it is clear , Depreciation is indirect and Fixed and should not be covered under direct.
Can you determine the actual wear and tear of Truck engine in 10000 kilometer Run .
Can you determine the depreciation to shed in storage of 10000 tonne of Steel or 11000 tonne of steel or 11001 tonne of steel .
I believe I satisfy your query.
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