Which of the Following Statements Is True Regarding Product and Period

question 58

Multiple Choice

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

• A) Delivery expense is a product cost and indirect materials is a period cost.
• B) Factory rent is a product cost and advertising expense is a period cost.
• C) Office rent is a product cost and supervisors' salaries expense is a period cost.
• D) Office salaries expense and factory maintenance are both product costs.
• E) Sales commissions and indirect labor are both period costs.

---

Definitions:

Collective Action Problem

A situation where individuals in a group have incentives not to participate in an action that would benefit all members of the group.

Property Rights

Legal rights to possess, use, and dispose of assets or resources, which are crucial for efficient market operations and investment decisions.

Negotiations Fail

When negotiations fail, it means that parties involved in discussions cannot reach an agreement or compromise on specific issues.

Efficient Level

The optimal point of production or operation where a firm or an economy can produce goods at the lowest cost and with the best allocation of resources.