Product costs are expensed
A) when the product is finished.
B) when the product unit cost is calculated.
C) when the product is sold.
D) all of these are correct.

Question

Quizplus · Accepted Answer

Product costs are expensed when the product is sold. This is because the cost of producing the product is included in the cost of goods sold, which is deducted from revenue to calculate net income for the period. Until the product is sold, the cost of producing it is considered inventory on the balance sheet. Therefore, it is not expensed until it is sold.

Product Costs Are Expensed