Now your eyes are glazing over. "So what", you say. Depreciation is one of those overheads that your margin/gross profit has to cover before you have pre-tax profits. You bought the kiln, and it is a part of your capital -- your investment in your business. But in five years you are going to have to buy another one, or you'll be out of business. Unless you account for depreciation in setting your prices, you won't have the cash flow to replace it when it wears out.
It's not necessary to tie yourself in knots trying the devise an internal method to account for your periodic depreciation expense. In most cases you can take the periodic charge and divide it by the number of units produced during that period. Or your machine may be rated to deliver you X number of units and then quietly expire, regardless of time periods. Suffice it to say that reasonableness is the issue here. Leave the convoluted shenanigans to your accountant to maximize the tax benefits of owning the machine.
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