Factory Machinery in
Manufacturing Statement

by Ambrose Siwin
(Papua New Guinea)

Q: In the Manufacturing Statement do I need to include the factory machinery under my factory overheads?

A: Hi Ambrose,

No, you would not include the machinery here as it is an asset. All items in this statement are costs (it is called the Manufacturing Cost Statement) and no assets, liabilities or equity or even income is included. Only costs or expenses relating to making the product.

However, factory machinery is subject to depreciation, and depreciation is certainly an expense or cost. Since the factory machinery is directly used in manufacturing, the depreciation cost would be included in this statement. And yes, this would be under overheads.

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