Full product cost includes both nonproduction costs and production costs required to satisfy customers.

Question

Quizplus · Accepted Answer

Full product cost includes all costs associated with producing and delivering a product to a customer, including both production costs (such as direct materials, direct labor, and manufacturing overhead) and nonproduction costs (such as marketing, sales, and administrative expenses). This is necessary in order to accurately determine the total cost of a product and set a price that will result in a profit.

Full Product Cost Includes Both Nonproduction Costs and Production Costs