The product cost that does not form part of the product but is incidental to product and facilitates the production activities is the?

Answer Details

The product cost that does not form part of the product but is incidental to production activities is the indirect cost. These are expenses that are necessary to produce a product but cannot be easily traced to a specific product, such as rent, utilities, and salaries of supervisors. Indirect costs are sometimes referred to as overhead costs and are usually allocated to products based on a predetermined cost allocation method, such as machine hours or labor hours. Direct costs, on the other hand, are costs that can be directly traced to a specific product, such as raw materials and labor.