Which of the following costs at a manufacturing company would be treated as a product cost under the absorption costing method?
A)Sales commissions
B)Fire insurance cost on factory building
C)Advertising costs
D)All of the above

Question

Quizplus · Accepted Answer

Only costs directly related to the production of a product are considered product costs under the absorption costing method. Fire insurance cost on a factory building is a cost that is incurred to maintain the factory building and therefore it is treated as a product cost. Sales commissions and advertising costs are not directly related to the production of a product and are treated as period costs.

Which of the Following Costs at a Manufacturing Company Would