Competitors often want to know the cost of a competing product. For a price, a company called Supply will disassemble sophisticated electronics and tell you what it would cost to replicate the product. The difference between the cost of the parts and the cost of the labor to assemble the parts isn’t all profit. There are nonproduction costs such as research, design, marketing, patent fees, and selling costs.
Explain nonproduction costs (research, design, marketing, patent fees, and selling costs), and how they are treated for accounting purposes.