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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Dave who wrote (146190)	10/29/2001 3:05:46 PM
From: BelowTheCrowd	Respond to of 186894

> Dan, another comment, you appear to thing that > Depreciation/Amortization affects gross margins.. It does > not... > > Gross margins are defined by: (Revenue - Cost of Goods > sold)/Revenue... With all due respect, the cost of "overhead" (which includes PP&E depreciation) is generally allocated to each and every product. It becomes part of the Cost of Goods Sold. This is quite correct and proper. After all, the cost of the plant is a legitimate component of the cost to make the product. There are different schemes for allocating costs to products. Cost accountants can debate this stuff almost indefinitely. Intel's process is fairly unique, but it does take into account all direct and indirect costs of manufacturing the product, including the cost of the capital equipment "used up" by manufacturing. This is why you don't see a "depreciation" category in the income statement. Depreciation is included in the Cost of Sales. mg