Question

Depreciation expense on sales equipment appears in a separate line on which of the following budgets?

a. Cash budget
b. Selling and administrative expenses budget
c. Direct labor budget
d. Production budget
e. Overhead budget

Answer 1

Depreciation expense on sales equipment is listed in the Selling and Administrative Expenses Budget because it reflects administrative costs over time.

Step-by-step explanation:

The depreciation expense on sales equipment appears in a separate line on the b. Selling and administrative expenses budget. This budget includes all expenses related to selling and managing the business that are not directly tied to the production of goods.

Depreciation is considered an administrative expense because it reflects the cost of using long-term assets over time, rather than being a direct cost of producing a product, like materials or labor. Therefore, it wouldn't be included in the direct labor or production budgets, which deal with the costs directly associated with producing goods.