Which of the following statements is True regarding product and period costs? An

Question

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

Explanation / Answer

Product costs are costs which add value to inventory. These costs are capitalized (added) to inventory, and later expensed as cost of goods sold when the goods are sold.Period costs are costs which are expensed immediately, such as office salaries and selling expenses, whether or not the goods are sold. 1) wrong factory maintance is not a period 2) salaries are product cost 3) Correct. Factory rent is a product cost and advertising expense is a period cost.

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