Which of the Following Would Be Considered a Product Cost

question 46

Multiple Choice

Which of the following would be considered a product cost for external financial reporting purposes?

• A)Cost of a warehouse used to store finished goods.
• B)Cost of guided public tours through the company's facilities.
• C)Cost of travel necessary to sell the manufactured product.
• D)Cost of sand spread on the factory floor to absorb oil from manufacturing machines.

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Definitions:

Facility Layout

The physical arrangement of resources, including machinery, equipment, and workspaces, within a factory or workplace to optimize production efficiency.

Processing

The action of performing a series of operations on something to change or preserve it.

Work Cell

An arrangement of resources in a manufacturing environment designed to process a specific set of tasks or a particular product, often as part of a lean manufacturing system.

Process-Oriented Facility

A type of manufacturing or service facility organized around specific processes or activities to produce goods or services.