For Each of the Following, Indicate Whether the Cost Would

question 46

Multiple Choice

For each of the following, indicate whether the cost would typically be considered a product or period cost for the cost object given.
-Electricity costs to run the factory

• A)Product
• B)Period

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Definitions:

Merchandise Inventory

Refers to the goods that a company has on hand for the purpose of selling to customers.

Sales Discount

A reduction in the sale price offered by a seller to a buyer, typically to prompt early payment or reward customer loyalty.

Freight Costs

Freight costs refers to the charges involved in transporting goods by land, sea, or air. This includes the expenses associated with moving merchandise from the point of origin to its destination.

F.O.B. Destination

A shipping term indicating that the seller bears the freight charges and retains ownership of the goods being shipped until they reach the buyer's location.