Depreciation of capital equipment is a major contributor to inventory holding cost.

Question

Quizplus · Accepted Answer

Depreciation of capital equipment is considered a non-cash expense related to the wear and tear or obsolescence of fixed assets over time, and it does not directly contribute to inventory holding costs. Inventory holding costs typically include expenses such as storage, insurance, taxes, and opportunity costs related to keeping inventory in stock.

Depreciation of Capital Equipment Is a Major Contributor to Inventory