Question

Which of the following major activities of a business will result in product costs?

Multiple Choice

• General administrative.

• Customer support.

• Marketing.

• Manufacturing.

Answer 1

Step 1

The costs that can be directly attributable to the produced goods are called product costs.

Step 2

General administrative costs do not include costs involved with the production of goods but represent the operation costs of the business.

The customer support costs are not directly assigned to the production of the goods but are a form of operational costs.

The marketing costs are primarily incurred by the organization for advertising, publicity and public relations hence forms part of selling costs and not attributable to the goods produced.

The manufacturing costs are directly attributable to the manufacturing activity hence forms part of product costs.

Hence the correct option is manufacturing costs.