All of the following are true regarding product costs except
A) product costs are found on the balance sheet until they are sold
B) product costs consist of direct labor, direct materials, and factory overhead
C) product costs can be found in three accounts on the balance sheet
D) product costs include sales and administrative expenses

Question

Quizplus · Accepted Answer

Product costs do not include sales and administrative expenses. These expenses are considered period costs and are expensed in the period in which they are incurred. Product costs consist of direct labor, direct materials, and factory overhead and are found on the balance sheet until the product is sold. They can be found in three accounts on the balance sheet: raw materials, work in process, and finished goods inventory.

All of the Following Are True Regarding Product Costs Except