Which of the following would likely be treated as a capital item by a clothing manufacturer?

In this context, a capital item refers to durable goods that are used in the production process and typically have a long lifespan, contributing to the production capacity of a business. Computer-controlled fabric cutting machines fit this definition perfectly, as they are significant investments that enhance the efficiency and accuracy of the manufacturing process. They are not consumed in one production cycle but rather used over extended periods, thus classifying them as capital items.

In contrast, fabric and sewing threads are considered raw materials and consumable items. They are used up in the manufacturing of clothing items and are typically purchased and replenished more frequently. Clothing patterns, while essential to the design process, are also not classified as capital items. They are more akin to tools or documents that guide the production rather than machinery or equipment that lasts and depreciates over time.

The classification of items in a manufacturing context helps businesses manage their finances and investment strategies effectively, and understanding the distinction between consumables and capital items is crucial for operational efficiency.