Rent on a Factory Building Would Be Considered to Be

question 36

Multiple Choice

Rent on a factory building would be considered to be

• A) a direct cost.
• B) a period cost.
• C) a product cost.
• D) administrative overhead.

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Definitions:

Depreciation Expense

The allocated portion of the cost of a tangible or physical asset that is written off as an expense over its useful life.

Revised Amounts

Adjusted figures in financial statements or budgets to reflect changes from previously reported or estimated numbers.

Straight-Line Method

A method of calculating depreciation for an asset, spreading the cost evenly over its useful life.

Depreciation Expense

It is an accounting method of allocating the cost of a tangible asset over its useful life.