Which of the following is not a product cost under full-absorption costing?
A) Direct materials used in the current period.
B) Rent for the warehouse used to store direct materials.
C) Salaries paid to the top management in the company.
D) Vacation pay accrued for the production workers.

Question

Quizplus · Accepted Answer

Under full-absorption costing, product costs include all costs necessary to manufacture a product, such as direct materials, direct labor, and manufacturing overhead. Salaries paid to top management are considered period costs, not product costs, as they are not directly tied to the production process.

Which of the Following Is Not a Product Cost Under