A. Product cost
B. Period cost
C. Both product cost and period cost
D. Neither product cost nor period cost
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COST OF GOODS SOLD DOES NOT INCLUDE PERIOD COST. ONLY PRODUCT COST CONSTITUTES COST OF GOODS SOLD
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A period cost is any cost that cannot be capitalized into prepaid expenses, inventory, or fixed assets. A period cost is more closely associated with the passage of time than with a transactional event. Since a period cost is essentially always charged to expense at once, it may more appropriately be called a period expense. A period cost is charged to expense in the period incurred. This type of cost is not included within the cost of goods sold on the income statement. Instead, it is typically included within the selling and administrative expenses section of the income statement. Examples of period costs are:
Selling expenses
Advertising expenses
Travel and entertainment expenses
Commissions
Depreciation expense
General and administrative expenses
Executive and administrative salaries and benefits
Office rent
answer is wrong correct ans is PRODUCT COST.
thanks for correction. answer updated