Which of the following would NOT be treated as a product cost for external financial reporting purposes?
A)Depreciation on a factory building.
B)Salaries of factory workers.
C)Indirect labor in the factory.
D)Advertising expenses.

Question

Quizplus · Accepted Answer

Advertising expenses would be treated as a period cost rather than a product cost, as they do not directly relate to the production of goods. Depreciation on a factory building, salaries of factory workers, and indirect labor in the factory are all examples of product costs as they directly relate to the production and manufacture of goods.

Which of the Following Would NOT Be Treated as a Product