Depreciation Is a _____, a Cost That Cannot Be Affected

question 86

Multiple Choice

Depreciation is a _____, a cost that cannot be affected by any future action.

• A) step cost
• B) opportunity cost
• C) sunk cost
• D) mixed cost
• E) None of these

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Definitions:

Weighted-Average Method

An inventory costing method that assigns a weighted average cost to items, blending the costs of similar items.

Units Transferred

The quantity of goods moved from one process, department, or stage of production to another.

Cost Category

A classification of costs based on their nature or function within a business, often used for accounting and budgeting purposes.

Step-Down Method

The step-down method is a cost allocation approach used in accounting, which assigns overhead costs to various departments in steps, based on specified allocation bases.