Why is Depreciation a Fixed Cost?

DannyT90
DannyT90 AAT Student, AATQB Posts: 159
Can anyone explain why a depreciation of say a vehicle is a fixed cost?

I'm on unit 3 of level 2 Elements of Costing and even though i haven't learnt about depreciation yet, I'm keen to know the answer to this question.

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  • Bertie
    Bertie Registered Posts: 376
    Depreciation is fixed also in the sense that regardless of profit or loss the expense will still occur.

    Straight-line depreciation is fixed.
    Reducing balance is fixed by nature yet the value of the expense will change from one period to another, so 'could' appear to be variable but isn't.

    Afair13
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