Is depreciation a period cost or product cost?

Question

the depreciation is on pizza ovens in a pizza resturant...

Answer 1

It's a product cost since it's identifiable to the pizza that's being produced. Depreciation on manufacturing equipment is part of manufacturing overhead. Depreciation of the cashier's counter would be a period cost as is the depeciation on the restaurant furniture.

Manufacturing overhead includes such things as the electricity used to operate the factory equipment, depreciation on the factory equipment and building, factory supplies and factory personnel (other than direct labor). How these costs are assigned to products has an impact on the measurement of an individual product's profitability.

The chapter on manufacturing overhead gives a fuller discussion at the link.

Answer 2

Even though property tax is incurred every period, it is related to the manufacturing process and therefore considered a Product cost.

Answer 3

It's "Spending Power" , for instances , The Dollar has deprecated 33% since 2001 to present , in other words if you saved your 2001 dollar till now it only buys .66 cents compared) or 1970's , it has lost 85% or worth .15cents , fiat money need's to be converted to something tangable to stave off inflation ( like gold or silver ) prehaps a pizza oven could be an tangable asset ..

Answer 4

a period cost.