Generally accepted accounting principles (GAAP)mandate that manufacturing overhead MUST be treated as an inventoriable product cost for financial reporting purposes.

Question

Quizplus · Accepted Answer

GAAP requires that manufacturing overhead costs be allocated and included in the cost of inventory for financial reporting purposes. This is because manufacturing overhead costs are indirect expenses that are necessary to produce the product and should be absorbed by the inventory cost until the product is sold.

Generally Accepted Accounting Principles (GAAP)mandate That Manufacturing Overhead MUST Be