Question

Skoot, an e-commerce startup company, recently paid $300,000 to Widget Corp., a company that provides Internet services and products including cloud computing and online searches, to gain access to the data regarding online product searches. In the context of the costs of useful information, it can be concluded that Skoot incurred _____.

Answer 1

Skoot incurred an information cost by paying $300,000 for access to data regarding online product searches, seeing it as an investment to enhance their business operations.

Step-by-step explanation:

It can be concluded that Skoot incurred an information cost when it paid $300,000 to Widget Corp. for access to data on online product searches. Information cost is the expense of obtaining, processing, and interpreting data so that a company can make informed decisions to enhance its business operations. In this case, Skoot considers the money spent as an investment to gain insights into consumer behavior, which it anticipates will improve its marketing strategies, product offerings, and ultimately its revenue.

Answer 2

Selling expenses

Step-by-step explanation:

Selling expenses are the costs associated with distributing, marketing and selling a product or service.

Skoot wants data regarding online product searches which they would use to design their marketing campaigns and to gather customer insights.

The cost incurred is an expense that is termed selling expense, that would be classified as indirect expenses on their Income statement because they do not contribute directly to the making of products or delivery of a services.