Question

The product cost concept includes the selling and administrative expenses in the cost amount to which the markup is added to determine product price. 1) True 2) False

Answer 1

The product cost concept includes the selling and administrative expenses in the cost amount to which the markup is added to determine product price.

2) False

Step-by-step explanation:

The product cost is made up of the following costs: direct labor, direct materials, consumable production supplies, and factory overhead. It does not include selling and administrative expenses. The total cost is then marked up to determine the product price at which it can be sold to customers. The markup will then cover the other expenses incurred in running the business and the expected profit per unit.