How does a manufacturing company classify sales commissions?
A)As indirect labour
B)As product costs
C)As manufacturing overhead
D)As period costs

Question

Quizplus · Accepted Answer

Sales commissions are considered as a period cost because they are incurred as a result of the company's efforts to generate sales revenue. They are not directly related to the production of goods or services, and therefore, cannot be classified as direct labour, product costs, or manufacturing overhead.

How Does a Manufacturing Company Classify Sales Commissions