For a manufacturing business, which of the following would be considered a product cost?
A)Depreciation on delivery vehicles
B)Depreciation on administrative building furniture and fixtures
C)Depreciation on manufacturing equipment
D)Depreciation on the accounting department's computer equipment

Question

Quizplus · Accepted Answer

Depreciation on manufacturing equipment is a direct cost that is directly related to the production of the goods sold. This cost is included in the cost of goods sold and is considered a product cost. Depreciation on delivery vehicles and administrative building furniture and fixtures are not related to the production of goods sold and are considered indirect costs or overhead expenses. Depreciation on accounting department's computer equipment is also an indirect cost and is not related to the production of goods sold.

For a Manufacturing Business, Which of the Following Would Be