Category: Accounting

Difference between period and product cost,”Product costs are costs incurred in the manufacturing process (materials, labor, and overhead). These costs have not been used to help earn revenue. Rather, they are used to produce inventory, an asset. So long as the inventory remains on hand, all product costs (materials, labor and overhead) remain in an inventory account. When the inventory is sold, revenue will be earned and the cost of the asset sold is transferred from the asset account to the cost of goods sold account

Managerial Accounting

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