Accounting Dictionary - Letter P

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Product costs
are costs required to produce inventory and make it ready for sale. Such costs are directly associated with inventory production. Period costs are capitalized (recorded) in the inventory account when they are incurred and expensed in the period when inventory is sold. Examples of product costs include direct materials, direct labor, and factory overhead.
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