Selling and administrative expenses (such as commissions paid to sales personnel) are considered part of product costs under variable costing.

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Under variable costing, only the costs that vary directly with production (like direct materials, direct labor, and variable manufacturing overhead) are considered product costs. Selling and administrative expenses, including commissions, are treated as period costs and are not included in product costs.

Selling and Administrative Expenses (Such as Commissions Paid to Sales