Depreciation on production equipment is： (i) Not a cash cost (ii) Part of production overheads (iii) Part of prime cost (iv) Always calculated using a machine-hour rate(2 marks) A (i) and (ii) B (iii) and (iv) C (i), (ii) and (iii) D All of them
Not a cash cost and part of production overheads The depreciation on production equipment is an indirect expense incurred in the factory and is therefore included in production overheads. (Chapter 3)
