Question

Study the following passage and answer the questions:

Selling cost is categorized as expenses associated with marketing a company's brand, product, or service via media outlets. Selling cost is a cost paid by the company for print advertisements, radio or TV broadcasts, online, or via direct mail promotion. Selling cost is sometimes recorded as a prepaid expense on the balance sheet and then moved to the income statement when sales related to those costs come in. Selling cost is a way to increase a company's sales through brand or product awareness and to inform about new products or features. Several studies show that selling cost does, generally speaking, work to boost revenues.

Questions:

1. Define selling cost in your own words.
2. Why do companies incur selling costs?

Answer 1

1. A selling cost is the amount that a business pays for advertising to be printed, broadcast on radio or television, promoted online, or sent out via direct mail.
2. Selling costs are incurred when a business uses media channels to market its name, goods, or services. The corporation covers the cost of selling in order to raise consumer awareness of new products and features and boost sales through product awareness.