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How would each of the following costs be classified if units produced is the activity base? (a)

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How would each of the following costs be classified if units produced is the activity base?
(a) Salary of factory supervisor ($70,000 per year)
(b) Straight-line depreciation of plant and equipment
(c) Property rent of $6,000 per month on plant and equipment

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a Fixed costs b Fixed costs c ...View the full answer


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Akash Goel
I am in the teaching field since 2008 when i was enrolled myself in chartered accountants course Since then i have an experience of teaching of class XI, XII, BCOM, MCOM, MBA, CA CPT.
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Survey of Accounting

Survey of Accounting

ISBN: 978-0538749091

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In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue

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