Question

Earl explained to Bubba that all of the following are considered product costs except:

A. Property tax on the factory building.
B. Advertising.
C. Factory workers' salaries.
D. Indirect materials used in production.

Answer 1

Product costs include direct materials, direct labor, and manufacturing overhead, but not advertising.

Step-by-step explanation:

The correct answer is B. Advertising. Product costs are the costs directly incurred in the production of goods or services. They include items such as direct materials, direct labor, and manufacturing overhead. Advertising, on the other hand, is considered an example of a selling expense or period cost, as it is not directly associated with the production process. costs here: