Production costs that are not attached to units that are sold are reported as:
A) selling expenses.
B) cost of goods sold.
C) administrative costs.
D) inventory.

Question

Quizplus · Accepted Answer

Production costs that are not attached to units that are sold are considered as inventory costs. These may include direct materials, direct labor, and manufacturing overhead costs. These costs are added to the cost of units produced and are initially recorded as inventory until the units are sold, at which point they are transferred to the cost of goods sold account.

Production Costs That Are Not Attached to Units That Are