Marshall Corporation incurred costs for materials and labor needed to manufacture its products.These costs are an example of:
A)Period costs.
B)Product costs.
C)General costs.
D)Balance sheet costs.
E)Capitalized costs.

Question

Quizplus · Accepted Answer

Costs incurred for materials and labor needed to manufacture products are considered product costs, which are typically capitalized and recorded as inventory until the products are sold. Period costs, on the other hand, are expenses that are not directly related to the production of goods, such as marketing and administrative expenses. General costs, balance sheet costs, and capitalized costs are not commonly used accounting terms.

Marshall Corporation Incurred Costs for Materials and Labor Needed to Manufacture