Which of the following would be considered a product cost for a manufacturing company? A. depreciation on manufacturing equipment B. depreciation on administrative building furniture and fixtures C. depreciation on the accounting department's computer equipment D. depreciation on delivery vehicles

Question

Tomas Perkins

Business

14 February, 20:59

Which of the following would be considered a product cost for a manufacturing company? A. depreciation on manufacturing equipment B. depreciation on administrative building furniture and fixtures C. depreciation on the accounting department's computer equipment D. depreciation on delivery vehicles

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Answers (1)

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Petty · Answer 1

The correct answer is letter "A": depreciation on manufacturing equipment.

Explanation:

Product costs are those related to the production process. They can refer to costs in direct labor, direct material, production supplies, and factory overhead. Product costs are also called product unit costs and are calculated by all the costs incurred in a production by the number of units produced.

Depreciation on manufacturing equipment is considered as factory overhead, thus, it is a product cost.