Because of the guidelines set by accrual accounting reporting standards, depreciation expense must be recognized on the income statement (and usually embedded within COGS and Opex). In conclusion, Capital Expenditures are a fundamental aspect of financial management. They reflect a company’s forward-thinking approach and its...

As you can imagine, using just one cost driver can lead to inaccurate cost measurements. Direct labour and materials are relatively easy to trace directly to products, but it is more difficult to directly allocate indirect costs to products. Where products use common resources differently,...