Select the incorrect statement regarding the recognition of depreciation on manufacturing equipment.
A) Recognizing depreciation on manufacturing equipment is an asset exchange event.
B) Depreciation on manufacturing equipment is an indirect product cost.
C) Recognizing depreciation on manufacturing equipment decreases the equipment's book value and increases the manufacturing overheadManufacturing Overhead account.
D) If the equipment was used to work on a job,the amount of depreciation must be entered on the appropriate job cost sheet.

Question

Quizplus · Accepted Answer

It is either not possible or not cost-effective to trace costs of indirect costs,including depreciation,directly to particular jobs.Instead,these costs are included in manufacturing overhead,which is applied to work in process and to jobs using a predetermined overhead rate.

Select the Incorrect Statement Regarding the Recognition of Depreciation on Manufacturing