Question

Which of the following properly describes product costs?

Select one:

a. Product costs will include marketing expense

b. Product costs are immediately expensed on the income statement when incurred

c. Product costs are not recorded as inventory, but are immediately recorded as COGS

d. Product costs are regarded as inventory

Answer 1

Product Cost:

The cost incurred to Produce (or) Manufacture the Product, Product Cost Includes Direct material, Direct Labor, Direct Expenses, Manufacturing Overheads. Product Cost never includes the Selling and Administrative Overheads.

Cost of Goods Sold includes all the direct expenses and Manufacturing overheads of the product. Inventory includes the beginning inventory, WIP, and Finished inventory also. but Before the product sold the Product cost is recorded as the inventories on the balance sheet

Answer: D: Product Costs are Regarded as inventory.