Which of the following would not be classiﬁed as a product cost?
A)Direct materials.
B)Direct labor.
C)Indirect materials.
D)Insurance on a manufacturing plant.
E)Sales bonuses for meeting quota sales.

Question

Quizplus · Accepted Answer

Sales bonuses for meeting quota sales would be considered an operating expense or period cost, rather than a product cost. Product costs include the direct materials, direct labor, and indirect costs (such as manufacturing overhead) required to produce a product, while operating expenses are incurred in the normal course of business, such as selling expenses or administrative expenses. Insurance on a manufacturing plant, on the other hand, would be considered an indirect cost and thus a product cost.

Which of the Following Would Not Be Classiﬁed as a Product