For a merchandising company, factory insurance and depreciation are product costs.

Question

Quizplus · Accepted Answer

Factory insurance and depreciation are not product costs for a merchandising company. Instead, they would be considered as overhead or operating expenses. Product costs for a merchandising company would include the cost of the items they buy from suppliers, any shipping or freight costs, and any additional costs associated with preparing the items for resale (such as packaging or labeling costs).

For a Merchandising Company, Factory Insurance and Depreciation Are Product