Which of the following statements is regarding product and period costs?
A) Office salaries expense is a product cost and factory maintenance is a period cost.
B) Office rent is a product cost and supervisors' salaries expense is a period cost.
C) Factory rent is a product cost and advertising expense is a period cost.
D) Delivery expense is a product cost and indirect materials is a period cost.
E) Sales commissions is a product cost and indirect labor is a period cost.

Question

Quizplus · Accepted Answer

Factory rent is a cost directly related to the production of goods, therefore it is a product cost. Advertising expense, on the other hand, is not directly related to the production process and is considered a period cost. The other options have incorrect pairings of product and period costs.

Which of the Following Statements Is Regarding Product and Period