Which of the following costs is a product cost?
A)lease payments on cars used by salespersons
B)president's salary
C)property taxes on factory building
D)depreciation on office equipment

Question

Quizplus · Accepted Answer

Product costs are those costs that are incurred to acquire or manufacture a product. Property taxes on a factory building (C) are directly associated with the production facility, hence considered a product cost. Costs like lease payments on cars used by salespersons (A), the president's salary (B), and depreciation on office equipment (D) are considered period costs, not directly tied to the production process.

Which of the Following Costs Is a Product Cost