Question

Which of the following would you include within the cost of sale?

• A. Depreciation of vehicles
• B. Depreciation of furniture
• C. Depreciation of machinery used in production effort
• D. Depreciation of office equipment

Answer 1

The correct option is C Depreciation of machinery used in production effort

Cost of sale include those costs which contribute into selling of the asset.

Depreciation of machinery used in production is one such cost and shall be added in cost of sale since it is based on output, which decreases with the passage of time.