The following are all examples of product costs:
A) Direct material, direct labor and indirect labor.
B) Direct labor, VP of sales salary, and insurance on the factory.
C) Depreciation on the factory equipment, depreciation on the office building, and depreciation on the factory building.
D) Factory insurance, interest expense, and property taxes on the factory.
E) Office supplies, sales commissions, and maintenance costs on office copier.

Question

Quizplus · Accepted Answer

Direct material, direct labor, and indirect labor are all direct costs associated with creating a product.

Answer: B
 Direct labor is a product cost, but VP of sales salary and insurance on the factory are not directly related to creating a product.

Answer: C
 Depreciation on factory equipment, office building and factory building are all indirect costs associated with creating a product.

Answer: D
 Factory insurance, interest expense, and property taxes on the factory are all indirect costs associated with creating a product.

Answer: E
 Office supplies, sales commissions, and maintenance costs on office copier are not directly related to creating a product.

The Following Are All Examples of Product Costs