Q16-5SE-f
Question
Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:
f. Cost of TV ads.
Step-by-Step Solution
Verified Answer
The cost of TV ads will come under the period cost.
1Definition of Advertising expense
The advertising expense is defined as the cost incurred by the business on promoting or advertising a brand or a business.
2Identification of cost
The correct option is Period cost.
The company has incurred the expense to advertise the product or the brand on TV. This will be considered as the selling and administrative expense. So, it will come under period cost.
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