Depreciation of factory equipment is classified as:
A)operating cost.
B)opportunity cost.
C)manufacturing overhead.
D)prime cost.
E)administrative cost.

Question

Quizplus · Accepted Answer

Depreciation of factory equipment is a cost associated with the manufacturing process, and therefore is classified as manufacturing overhead. Operating cost refers to the cost of running day-to-day operations, opportunity cost is the cost of a missed opportunity, prime cost is the cost of direct materials and labor, and administrative cost is related to the management and administration of a business.

Depreciation of Factory Equipment Is Classified As