CapEX does not accrue D&A until the asset is placed in service.
"1.
Manufacturing overhead(also referred to as factory overhead, factory burden, and manufacturing support costs) refers to
indirect factory-related costs that are incurred when a product is manufactured. Along with costs such as direct material and direct labor, the cost of manufacturing overhead must be assigned to each unit produced so thatInventoryandCost of Goods Soldare valued and reported according to generally accepted accounting principles (GAAP).
Manufacturing overhead includes such things as the electricity used to operate the factory equipment, depreciation on the factory equipment and building, factory supplies and factory personnel (other than direct labor). How these costs are assigned to products has an impact on the measurement of an individual product's profitability.
2.
Nonmanufacturing costs(sometimes referred to as "administrative overhead") represent a manufacturer's expenses that occur apart from the actual manufacturing function. In accounting and financial terminology, the nonmanufacturing costs includeSelling, General and Administrative (SG&A)expenses, andInterest Expense.Since accounting principles do not consider these expenses as product costs, they are not assigned to inventory or to the cost of goods sold. Instead, nonmanufacturing costs are simply reported as expenses on the income statement at the time they areincurred.
Nonmanufacturing costs include activities associated with the Selling and General Administrative functions. Examples include the compensation of nonmanufacturing personnel; occupancy expenses for nonmanufacturing facilities (rent, light, heat, property taxes, maintenance, etc.); depreciation of nonmanufacturing equipment; expenses for automobiles and trucks used to sell and deliver products; and interest expenses. (Note that
factoryadministration expenses are considered part of manufacturing overhead.)"
Manufacturing Overhead Costs | Explanation | AccountingCoach
