Which of the following is correct?
A) Selling costs are product costs.
B) Manufacturing overhead costs are product costs.
C) Interest costs for routine inventories are product costs.
D) Direct labour costs are usually period costs.

Question

Quizplus · Accepted Answer

Manufacturing overhead costs such as indirect labour, rent, utilities, and depreciation are considered product costs as they are necessary expenses for producing a product. Selling costs (option A) and interest costs for routine inventories (option C) are considered period costs as they are incurred in the period in which they are paid and are not directly related to production. Direct labour costs (option D) are also considered product costs as they are tied to the production of a specific product.

Which of the Following Is Correct