For the purpose of calculating inventory,product costs include only:
A)direct costs.
B)indirect costs.
C)variable costs.
D)inventoriable (manufacturing)costs.
E)mixed costs.

Question

Quizplus · Accepted Answer

Inventoriable costs, also known as manufacturing costs, include direct materials, direct labor, and overhead costs directly associated with the production of goods. They are the only costs included in the calculation of inventory costs because they are necessary to produce and sell the goods. Indirect costs, variable costs, and mixed costs may be relevant for other financial analyses, but they are not included in the inventory cost calculation.

For the Purpose of Calculating Inventory,product Costs Include Only