To be sure, âSunday Night Footballâ remains the most expensive program on TV for advertisers, commanding an average of $637,330 for a 30-second spot. But its ability to gain more from Madison Avenue remains in doubt. Last season, the average price of a 30-second ad in the show fell 0.8% to $623,425.
In other words, selling, marketing, and advertising costs are not part of getting the products ready to sell. Since these costs are not incurred solely for the purpose of manufacturing products, they are not considered product costs. By default, since these costs are not product costs, they are period costs.
Elements of Product Cost. Cost can be classified depending on the financial format used for reporting. For manufacturing companies, cost is usually reported based on product cost. Under this reporting format, the cost needs to be broken out into direct materials, direct labor, and overhead/indirect costs (figure 4).