Indicate whether the item applies to fixed costs or variable costs.

-depreciation

Question

Indicate whether the item applies to fixed costs or variable costs.

-depreciation

Quizplus · Accepted Answer

Depreciation is a fixed cost that is incurred over a period of time for a long-term asset like machinery or equipment. It represents the decrease in the value of the asset due to wear and tear or obsolescence over time. The depreciation cost does not depend on the level of production or sales and remains constant unless there is a change in the accounting method or asset's life. Therefore, it is considered a fixed cost in the overall cost structure of a business.

Indicate Whether the Item Applies to Fixed Costs or Variable