An Example of a Product Cost Is

question 29

Multiple Choice

An example of a product cost is:

• A)delivery expense for the product.
• B)a portion of the president's compensation expenses.
• C)interest expense on a loan to finance a new sales office.
• D)wages of the production line maintenance staff.

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Definitions:

Work in Process

Inventory that is in the production process but is not yet completed or ready for sale.

Finished Goods

Merchandise that has undergone the entire manufacturing process and is prepared for sale to buyers.

Direct Labor

The labor costs of workers who are directly involved in the production of goods or services.

Indirect Labor

Labor costs not directly tied to the production of goods or services, such as maintenance staff and supervisors.