Which of the following views of product costs is consistent with financial reporting requirements?
A) Product costs are all costs incurred in the process of manufacturing products, even if they are only indirectly related to the production process.
B) Product costs are all labor and materials costs that are incurred in the process of manufacturing products.
C) Product costs are all costs directly incurred in the manufacturing and selling of the product.
D) Product costs include all costs incurred throughout the value chain.

Question

Quizplus · Accepted Answer

Product costs in the financial statements include all cost related to the manufacturing function, including both direct and indirect manufacturing costs. Non-manufacturing costs are considered to be period costs.

Which of the Following Views of Product Costs Is Consistent