ECONOMICS

Detailed explanation-1: -Repair Costs means costs and expenses reasonably necessary or desirable due to normal wear and tear, periodic replacement, vandalism, damage, or destruction of any portion of the Facility Property, and shall not include Operating Costs.

Detailed explanation-2: -Repairs to factory machinery would be classified as an indirect expenses.

Detailed explanation-3: -Repairs to machinery is shown as expenses in Profit or loss account.

Detailed explanation-4: -Repairs to factory equipment are not period costs. Rather, the costs of repairs to factory equipment are product costs. The repair costs within the factory are part of the factory overhead (also known as manufacturing overhead) which is assigned to the products when they are manufactured.