Depreciation on a factory machine is an example of which of the following types of cost?
A)Variable cost
B)Sunk cost
C)Opportunity cost
D)Period cost

Question

Quizplus · Accepted Answer

Depreciation on a factory machine is considered a sunk cost because it represents a past expenditure that cannot be recovered or changed. It is not variable, as it does not change with the level of production; it is not an opportunity cost, which represents the cost of a foregone alternative; and it is not a period cost, which typically includes expenses that are not directly tied to production activities, such as administrative expenses.

Depreciation on a Factory Machine Is an Example of Which