Reference:
Charlie's Chocolate Factory manufactures chocolate bars and ships them directly to wholesalers and retailers across the country. The company has two product lines: milk chocolate bars and chocolate covered almonds. Classify the following company's expenses if the cost object is a single product line (either milk chocolate bars or chocolate covered almonds).
-Rent on the production factory.
A)Indirect product cost.
B)Direct product cost.
C)Direct period cost.
D)Indirect period cost.

Question

Quizplus · Accepted Answer

Rent on the production factory is an indirect product cost because it is necessary for the production process but cannot be directly traced to a single product line.

Reference: Charlie's Chocolate Factory Manufactures Chocolate Bars and Ships Them Directly