Product costs are converted from cost to expense when
A)units are completed.
B)materials are purchased.
C)units are sold.
D)materials are requisitioned.

Question

Quizplus · Accepted Answer

Product costs are converted from cost to expense when the units are sold. At the time of sale, the cost of goods sold (COGS) is recorded by transferring the cost of completed units from the inventory account to the COGS account. This conversion is necessary to accurately measure the net income of the business.

Product Costs Are Converted from Cost to Expense When