Replies to post #226293 on Plastic2Oil Inc (PTOI)

[loanranger]

I thought about that.
The failure to operate at a certain capacity doesn't change the nature of the cost/expense. For example, the rent for a manufacturing facility that can only operate when it's sunny wouldn't allocate it's rent for cloudy days to S,G&A...the total rent would be absorbed by its actual production, even in really rainy quarters. In the same way, the depreciation of machinery used in production would be absorbed by the total fuel produced, whether it was in running order or not. A machine operator could theoretically be assigned an alternative duty, say investor relations, and his costs could be re-allocated to S,G&A......such a reallocation isn't possible with the depreciation of equipment that is solely used to produce. All of its costs must be absorbed by whatever the output happens to be.