Product costs are:
A) expended as they are incurred.
B) inventoriable costs.
C) period costs.
D) expended as they are incurred AND inventoriable costs.

Question

Quizplus · Accepted Answer

Product costs are costs that can be directly attributed to the production of a final product or service. These costs are inventoriable costs because they are initially recorded as assets (e.g. raw materials, work-in-progress, finished goods) until the product is sold, at which point they are expensed as cost of goods sold. Product costs are not immediately expensed as they are incurred, and they are not considered period costs (which are expensed in the period incurred and not associated with production). Therefore, option B is the correct choice as it accurately defines product costs.

Product Costs Are