When are product costs expensed?
A) when the product is sold
B) when the product is finished
C) when the product begins production
D) when the product unit cost is calculated

Question

Quizplus · Accepted Answer

Product costs are expensed when the product is sold. This is known as the matching principle, where expenses should be matched with the revenue they help to generate. Therefore, product costs such as materials, labor, and overhead are not expensed until the product is sold and the revenue is recognized.

When Are Product Costs Expensed