The cost of which one of the following business functions making up the value chain is included in product costs for financial reporting purposes under generally accepted accounting principles?
A) Product design.
B) Research and development.
C) Customer service.
D) Manufacturing.

Question

Quizplus · Accepted Answer

Manufacturing costs, including direct materials, direct labor, and overhead costs, are included in the cost of goods sold for financial reporting purposes. Product design, research and development, and customer service costs are typically expensed as incurred and do not become part of the product cost until the product is manufactured.

The Cost of Which One of the Following Business Functions