Which of the following would be considered a product cost for external financial reporting purposes?
A)Cost of a warehouse used to store finished goods.
B)Cost of guided public tours through the company's facilities.
C)Cost of travel necessary to sell the manufactured product.
D)Cost of sand spread on the factory floor to absorb oil from manufacturing machines.

Question

Quizplus · Accepted Answer

Product costs are costs that are directly associated with the manufacturing of goods. The cost of sand used in the factory is a direct manufacturing cost, as it is used in the production process to maintain the machinery.

Which of the Following Would Be Considered a Product Cost