Product costs for financial statements may refer to ________.
A) inventoriable costs for external reporting purposes
B) exchange cost incurred during transportation
C) only the costs incurred along the supply chain
D) opportunity costs incurred for the decisions forgone

Question

Quizplus · Accepted Answer

Product costs for financial statements generally refer to inventoriable costs for external reporting purposes, such as direct materials, direct labor, and manufacturing overhead costs. These costs are assigned to the products and are reported on the balance sheet as inventory until the products are sold, at which point they are expensed as cost of goods sold on the income statement. Exchange costs incurred during transportation or opportunity costs incurred for the decisions forgone are not generally considered product costs for financial reporting purposes.

Product Costs for Financial Statements May Refer to ________