Questions: Which of the following is a product versus a period cost? a. advertising expense b. indirect materials used c. salespersons' commissions d. depreciation on store equipment

The answer is B: indirect materials used.

Explanation for each option:

a. Advertising expense - This is a period cost. Period costs are expenses that are not directly tied to the production process and are expensed in the period in which they are incurred. Advertising expenses are related to selling and administrative activities, not the manufacturing process.

b. Indirect materials used - This is a product cost. Product costs are those that are directly associated with the manufacturing of goods. Indirect materials are part of manufacturing overhead, which is included in product costs because they are necessary for the production process, even though they are not directly traceable to a specific product.

c. Salespersons' commissions - This is a period cost. Similar to advertising expenses, sales commissions are related to selling activities and are not directly tied to the production of goods. They are expensed in the period in which the sales occur.

d. Depreciation on store equipment - This is a period cost. Depreciation on store equipment is related to the selling and administrative functions of a business, not the manufacturing process. Therefore, it is considered a period cost.