Repairs & Maintenance classification

Hi

R&M is classified as indirect cost. Sometimes it's mentioned as Semi variable or variable cost (which means a direct cost). Even I think all factory repairs and maintenance can be shown as direct cost because

the economic benefit is usual, that is, sales will continue

Even if a new spare like air compressor is replaced during Repairs & Maintenance, that spare is capitalised.

When welding works happen, it is an expense etc.

Why is Repairs and Maintenance given an indirect cost classification when it has broader perspective when all the above example impact per unit cost? 

 

 

Replies (13)
Quick Summary
This discussion delves into the classification of Repairs & Maintenance (R&M) costs, questioning why they are often treated as indirect costs. The participants debate whether R&M, especially for factory equipment, should be considered a direct cost due to its direct impact on sales continuity and unit cost. The conversation also touches upon the role of cost centres in allocating these expenses within accounting software and the distinction between absorption costing and Activity-Based Costing (ABC).

Cost centre allocation needs to be given. On which cost centre it has got to be absorbed.

What has cost center has to do with it when it's absorbtion costing and not ABC. In tally cost centre is department. Ok got it. We have to assign a cost center for Repairs and Maintenance ledger and I forgot since I'm not in my office now. So how can a cost center help when we don't classify cost center under direct or indirect group? Besides there are no predefined cost centers like groups for ledgers have. 

What has cost center has to do with it when it's absorbtion costing and not ABC. In tally cost centre is department. Ok got it. We have to assign a cost center for Repairs and Maintenance ledger and I forgot since I'm not in my office now. So how can a cost center help when we don't classify cost center under direct or indirect group? Besides there are no predefined cost centers like groups for ledgers have. 

What has cost center has to do with it when it's absorbtion costing and not ABC. In tally cost centre is department. Ok got it. We have to assign a cost center for Repairs and Maintenance ledger and I forgot since I'm not in my office now. So how can a cost center help when we don't classify cost center under direct or indirect group? Besides there are no predefined cost centers like groups for ledgers have. 

I simply meant to say, cost centers can't be defined under direct or indirect groups 

Bro,
He wrongly think the cost (value) as Cost Centre in Accounting Software.
So, Be Cool...
If it's general repair maintenance then ok otherwise.

General repair & maintenance sounds good for indirect costs. Repairs and maintenance for factory and vehicle maintenance which is used for transportation inwards.

I would like to use indirect cost criteria for vehicles maintenance used in the supply of goods to customers. Then why can't we use it as inventory cost? 

Ok forgot vehicle is capex and has its own treatment. Maybe include fuel costs into inventory?

If proper absorption costing is utilized then in each cost centre proper absorption should be used .

That is for ABC sir where indirect costs are allocated to direct costs. I know full cost plus pricing method as well where opportunity costs are also included without cost center issues. Just prime costs and overheads make a wonderful meal to cost a product. Anyways, did anyone went through my blogspot? I invented a real pricing technique which rallies a balance sheet plus gives the price of the product. I did not receive any criticism on that

Do not make it complex .
ABC costing does not applies here.

Your the saying same thing what I said. It's not ABC. Cheers

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
22 September 2026
Account Assistant

Chirag P Shah & Co. Chartered Accountant

Pune

B.Com

View Details
Company
08 October 2026
SALES TELECALLER

HIRE NOVA

Lucknow

Graduate (Any)

View Details
Company
ARTICLESHIP 08 October 2026
ARTICLE TRAINEE

S.B.G. & CO. CHARTERED ACCOUNTANTS

New Delhi

CA Inter

View Details
Company
Featured 03 October 2026
Accountant

A P Lodha and Associates

Jalna

B.Com

View Details
Company
08 October 2026
Account Executive

Elite Taxation

New Delhi

CA Foundation

View Details
Company
06 October 2026
Assistant Manager - Audit and Compliance

Ravi K Jain & Co

Noida

Others

View Details
Company
Featured ARTICLESHIP 06 October 2026
Semi Qualified

AJAY SINGH AND CO LLP

Thane

CA Final

View Details
Company
ARTICLESHIP 16 September 2026
Article Assistant

MANUJ SHARMA AND COMPANY

Noida

CA Inter

View Details