Accounting 3 Key PASSED Exam Questions and CORRECT Answers

Product Costs Include all costs that are required to make a product I.e Direct Material, Direct Labor, Manufacturing Overhead Are included as part of inventory and shown on the balance sheet until the product is sold. Product costs are often called "inventoriable costs" or "manufacturing costs". When the product is sold, the costs are "matched" to the sales revenue and reported on the income statement as cost of goods sold Period Costs Selling and Administrative costs. These costs are reported on the income statement as they are incurred. Not part of manufacturing overhead, not related to making the product. Examples: Anything at corporate headquaters, anything related to selling the product, shipping costs, administrative salaries, executive salaries, administrative office expenses, sales commissions, advertising, research and development, etc