Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Fees paid to an accounting firm for annual audit
A)Product Cost, Direct Material
B)Product Cost, Direct Labour
C)Product Cost, Manufacturing Overhead
D)Product Cost, Selling Expense
E)Product Cost, Administrative Expense
F)Period Cost, Direct Material
G)Period Cost, Direct Labour
H)Period Cost, Manufacturing Overhead
I)Period Cost, Selling Expense
J)Period Cost, Administrative Expense

Question

Quizplus · Accepted Answer

The fees paid to an accounting firm for an annual audit are considered a period cost and fall under the category of administrative expense. This cost is not directly related to the production or sale of a product, but rather it is an expense incurred in the normal course of business operations.

Select the Appropriate Classification of Each of the Costs Listed