Reference:
Tech Computer manufactures computers in its plant located in Toronto and then ships the computers directly to distributors and retailers. The company's accountant has enlisted you to classify the following company's expenses:
-The delivery charges incurred when shipping the computer hard drives to be installed in the computer.
A)Fixed period cost.
B)Fixed product cost.
C)Variable product cost.
D)Variable period cost.

Question

Reference: 
Tech Computer manufactures computers in its plant located in Toronto and then ships the computers directly to distributors and retailers. The company's accountant has enlisted you to classify the following company's expenses:
-The delivery charges incurred when shipping the computer hard drives to be installed in the computer.
A)Fixed period cost.
B)Fixed product cost.
C)Variable product cost.
D)Variable period cost.

Quizplus · Accepted Answer

The delivery charges incurred when shipping the computer hard drives to be installed in the computer is a variable product cost because it is directly related to the cost of producing and selling the product. As more products are sold, more delivery charges will be incurred.

Reference: Tech Computer Manufactures Computers in Its Plant Located in Toronto