Q16-5SE-d
Question
Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:
d. Salaries of the company’s top executives.
Step-by-Step Solution
Verified Answer
The salaries of company’s top executives will come under the period cost.
1Definition of manufacturing company
A manufacturing company is defined as a business organization that sells the goods produced by themselves
2Identification of cost
The correct option is Period cost.
In this case, the company is paying salaries to the top executive of the company. This comes under the selling and administrative expenses. So, it will be considered as the period cost.
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