Question

An example of a product cost is: A) advertising expense. B) a portion of the president’s...

An example of a product cost is:

A) advertising expense.

B) a portion of the president’s travel expenses.

C) interest expense on a loan to finance inventory.

D) production line maintenance costs.

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Homework Answers

Answer #1

Your required answer is option D i.e. Production line maintenance costs.

Explanation:

A product cost includes only those expenses or cost that is directly attributable to production like material, labor, direct overhead etc. Advertising expense and travel expense are indirect expense and it arises to increase the sales volume therefore those are not included in the cost of product.

I hope this clear your doubt.

Feel free to comment if you still have any query or need something else. I'll help asap.

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