Depreciation on forklifts used to transport materials should be accounted for as:
A) Manufacturing overhead cost
B) Period cost
C) Prime cost
D) Part of the direct materials cost

Question

Quizplus · Accepted Answer

Depreciation on forklifts used in the production process is considered an indirect cost because it does not directly contribute to the production of any single product. Instead, it supports the overall production process. Therefore, it is classified as manufacturing overhead cost, which includes all indirect costs associated with manufacturing beyond direct materials and direct labor.

Depreciation on Forklifts Used to Transport Materials Should Be Accounted