Depreciation of Factory Equipment Under the Direct Method Would Be

question 8

Multiple Choice

Depreciation of factory equipment under the direct method would be reported as a(n) :

• A)investing activity.
• B)operating activity.
• C)financing activity.
• D)It is not reported.

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Definitions:

Variable Costs

Costs that change in relation to the level of goods or services produced, such as materials and labor, in contrast to fixed costs.

Total Revenue

The total income generated from the sale of goods or services before any expenses are subtracted.

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs for raw materials and labor.

Fixed Costs

Expenses that remain constant regardless of the amount of production or output, like lease payments or wages.