Costs which are reported on the income statement as part of cost of goods sold are referred to as:
A) administrative expenses
B) period costs
C) cost of goods manufactured
D) operating expenses

Question

Quizplus · Accepted Answer

Costs which are reported on the income statement as part of cost of goods sold are called cost of goods manufactured. This includes direct materials, direct labor, and manufacturing overhead associated with producing the goods that are sold. Administrative expenses and operating expenses are reported separately on the income statement, while period costs refer to expenses that are not directly tied to the production of goods and are expensed in the period in which they are incurred.

Costs Which Are Reported on the Income Statement as Part