Question

​Corporation, a manufacturing​ company, is analyzing its cost structure in a project to achieve some cost savings. Which of the following statements​ is/are correct? I. The cost of the direct materials in ​'s products is considered a variable cost. II. The cost of the depreciation of ​'s plant machinery is considered a variable cost because uses an accelerated depreciation method for both book and income tax purposes. III. The cost of electricity for ​'s manufacturing facility is considered a fixed​ cost, even if the cost of the electricity has both variable and fixed components.

Answer 1

The cost of the depreciation of plant's machinery is considered a variable cost because machinery uses an accelerated depreciation method for book and income tax purposes

Step-by-step explanation:

A variable cost is an expense that is proportional to the production output. That is variable costs increase or decrease with respect to a company's production. This cost rise as production rises and falls as production falls. Costs of raw materials and packaging are examples of variable costs.

Here,

Corporation, a manufacturing​ company, is analyzing its cost structure in a project to achieve some cost savings.

The cost of the depreciation of plant's machinery is considered a variable cost because machinery uses an accelerated depreciation method for book and income tax purposes