ECONOMICS

Detailed explanation-1: -Depreciation is a fixed cost as it charges to the profit & loss account with the same amount per year throughout the useful life of an asset. But if the business applies the usage based policy of charging the depreciation, this can be considered as variable cost.

Detailed explanation-2: -Depreciation is one common fixed cost that is recorded as an indirect expense.

Detailed explanation-3: -Definition of ‘depreciation expense’ A depreciation expense is the amount deducted from gross profit to allow for a reduction in the value of something because of its age or how much it has been used. When you buy and own equipment, your business may be entitled to deduct a depreciation expense.

Detailed explanation-4: -The periodic, schedule conversion of a fixed asset into expense as an asset is called depreciation and is used during normal business operations. Since the asset is part of normal business operations, depreciation is considered an operating expense.