Under GAAP, for the purposes of calculating inventory costs, product costs include ________.
A) all costs incurred along the value chain
B) design costs
C) only inventoriable costs
D) only research and development costs

Question

Quizplus · Accepted Answer

GAAP requires that the cost of inventory includes all direct and indirect costs incurred to bring inventory to its present location and condition. These costs are referred to as inventoriable costs and include costs of purchase, conversion, and other costs incurred in bringing the inventory to its present location and condition. Design costs and research and development costs are not included in inventory costs.

Under GAAP, for the Purposes of Calculating Inventory Costs, Product