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Is depreciation on factory machinery fixed cost?
Yes
Is depreciation of factory plant and equipment a factory overhead cost?
YES
What are the arguments in favor of treating fixed manufacturing overhead cost as period costs?
Fixed manufacturing cost is treated as period cost because it has to be incurred no matter there is any production or not like machinery depreciation or building depreciation etc these kinds of costs cannot be eleminate in short run.
Is depreciation a controllable cost?
No. Depreciation would be considered an uncontrollable cost because it is fixed
If depreciation is charged on original cost than which method of depreciation should be used?
kavita purchased machinery of rs 5 lak on 1 jan 2007 she also paid instullation charged rs 5o thousand, she sold the machinary 2011 rs 4 lack depreciation is charged at 10 % on 31 dec pass the necessary journal entry under original cost method.
Is depreciation on factory machinery fixed cost?
Yes
What is a plant asset on the balance sheet?
Plant asset is the machinery asset which a business use to make units of products for selling purpose to generate revenue for business.
Is depreciation of factory plant and equipment a factory overhead cost?
YES
What are the arguments in favor of treating fixed manufacturing overhead cost as period costs?
Fixed manufacturing cost is treated as period cost because it has to be incurred no matter there is any production or not like machinery depreciation or building depreciation etc these kinds of costs cannot be eleminate in short run.
The process of allocating the cost of plant assets to expense over their useful lives is called-?
Depreciation
Is depreciation a fixed cost?
Yes it is a fixed cost. Reason being that a fixed cost remains unchanged in total as the level of activity increases or decreases. Example of fixed costs include depreciation of plant and equipment, cost of council rates and rent.
What is development rebate reserve?
The development rebate reserve is created out of development rebate. It is a special allowance, which the government extends in direct taxes to encourage investment, over and above depreciation on plant and machinery installed and commissioned. It is treated as the first charged on profits after depreciation. If, owing to inadequacy of profits it cannot be so charged, it can be carried forward to be charged against the profits of subsequent years. While depreciation reduces net value of the fixed asset and cannot exceed 100% of their original cost, development rebate leaves the net value of the assets untouched. The development rebate is applicable only to plant and machinery and not to all fixed assets. Both depreciation and development rebate augment the cash flow of a business.
Does the Depreciation measure the actual decline in market value of an asset?
No. Depreciation is the process of allocating to expense the cost of a plant asset.
Is depreciation a controllable cost?
No. Depreciation would be considered an uncontrollable cost because it is fixed
Is Depreciation can be calculated on capital expenditure?
Depreciation on Capital Expenditure is nothing but Depreciation on fixed assets. Cash Flow statement shows the Capex incurred during the particular time period,i.e. for Quarter or fiscal year. A CAPEX is an amount spent to acquire or improve a long term asset such as plant,equipment or buildings. Usually the cost is recorded in an account classified as Property,plant and equipment.The cost (Except for the cost of LAND) will then be charged to depreciation expense over the useful life of the asset.
Is depreciation a product dost?
Depreciation is a period cost and not a product cost as depreciation is still charged even if there is no production or sale of goods.
If depreciation is charged on original cost than which method of depreciation should be used?
kavita purchased machinery of rs 5 lak on 1 jan 2007 she also paid instullation charged rs 5o thousand, she sold the machinary 2011 rs 4 lack depreciation is charged at 10 % on 31 dec pass the necessary journal entry under original cost method.
