Question

What is the difference between period and product costs ?

Answer 1

Product Costs:-These are the costs wich are associated with the purchase and sale of goods.Such costs are related to acquisition and conversion of raw material and all other manufacturing inputs into finished products for sale.All manufacturing costs are product costs.

Period Costs:-these are the expenses which are not assigned to product but are charged as expenses against the revenue of the period in which they are incurred.All non manufacturing costs are period costs.