Relevant to what? Depreciation is an accounting contrivance to diminish taxable income.
No. Depreciation would be considered an uncontrollable cost because it is fixed
no
Please refer to the following Web site for a complete explanation on how depreciation affects the cost of capital: http://en.wikipedia.org/wiki/Depreciation
The source document of depreciation is typically the asset's acquisition invoice or purchase order, which provides details about the asset's cost, useful life, and method of depreciation. This document serves as the basis for calculating depreciation expenses over time, ensuring that the asset's value is systematically allocated in financial statements. Additionally, any relevant supporting documentation, such as maintenance records or appraisals, may also be considered in the depreciation process.
Depreciation is called a notional cost because it cannot be measured in real terms.
Only the total amount of a new machine is a relevant cost because this incurs in the future and incurs when a certain decision is made. The depreciation of old machines is a sunk cost so this is an unavoidable cost. The amount for the old machine you sell is a relevant cost because you will get this amount if you sell the old machine and buy the new one.
ongoing repairs are not relevant, the other three are all essential...
What principles dictate that an asset's cost should be expensed over its useful life
Depreciation is a sunk cost, so you should ignore it in relevatnt costing. you shoud be asking yourself the following question: can I avoid depreciations once I have bought the asset? You should always ignore deprecition when answering a relevant costing questions. You have already incurred the cost of the asset and as a result you can not avoid deprecition, that is why it is a sunk cost. Peace Tshepo
Yes, depreciation is considered a sunk cost in financial analysis. Sunk costs are costs that have already been incurred and cannot be recovered, so they are not relevant for future decision-making. Depreciation is a non-cash expense that reflects the decrease in value of an asset over time, and it is treated as a sunk cost in financial analysis.
No. Depreciation would be considered an uncontrollable cost because it is fixed
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.
no
Depreciation is an indirect cost as there is no separate identification in product cost that which cost is depreciation as deprecation is a overhead cost that’s why it is indirect cost.
The Sales Office is in charge of the selling of valuables of an entity. Thus, all expenses related to this office is debited to selling expenses. Furthermore, depreciation is a form of expense, and deserves a different account, but since it is related to the sales office, it is debited to selling expenses. Yes, it is a selling expense.
Please refer to the following Web site for a complete explanation on how depreciation affects the cost of capital: http://en.wikipedia.org/wiki/Depreciation
Cost of depreciation assets and accumulated depreciation is same as accumulated depreciaton calculates how much depreciation is charged till date while remaining is current book value of assets.