depreciation is an indirect cost as we dont know exactly how much of it goes towards producing 1 cost unit and the total cost of depreciation is not pertained to only one unit rather many units. But incase we know exactly how much time it takes for a machine to produce a cost unit , in that case can we say it a direct cost or it will still be an indirect cost. Explain plz.
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indirect cost
Also we dont exactly cant measure the depreciation cost for each machine hours so even thou we know how much time it takes for a cost unit of that machine but since we cant directly measure the cost of that much time , so it will still remain indirect cost. Is it right sir?
7y ago#2Depreciation is always an indirect cost. It does not vary directly with the number of units produced.
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