Which of the following statements is True regarding product and period costs?
A) Office salaries expense is a product cost and factory maintenance is a period cost.
B) Office rent is a product cost and supervisors' salaries expense is a period cost.
C) Factory rent is a product cost and advertising expense is a period cost.
D) Delivery expense is a product cost and indirect materials is a period cost.
E) Sales commissions is a product cost and indirect labor is a period cost.

Question

Quizplus · Accepted Answer

Product costs are expenses associated with creating and producing a product, while period costs are expenses that are not directly associated with production, such as advertising, rent, salaries, and maintenance. Factory rent is a product cost because it directly relates to the production of the product, whereas advertising expense is a period cost because it does not directly relate to the production process. None of the other choices correctly match a product cost with a period cost.

Which of the Following Statements Is True Regarding Product and Period