Wize University Managerial Accounting Textbook > Cost terms, concepts & classifications
Product vs Period Costs
Popular Courses
COMM 305
Concordia University
Managerial Accounting
University Study Guides
Managerial Accounting
University Study Guides
COMM 112
Queen's University
ACC 406
Toronto Metropolitan University
ACCTG 322
University of Alberta
ACCT 2230
University of Guelph
ADM 2341
University of Ottawa
RSM222H1
University of Toronto
COMMERCE 2AB3
McMaster University
ACTG 2020
York University
COMM 1102
Dalhousie University
ACC 312
The University of Texas at Austin
ACC 242
Arizona State University - Tempe
ACC 202
Michigan State University
ACIS 2116
Virginia Tech
ACG 2071
University of Central Florida
BUS1 21
San José State University
BUS-A 306
Indiana University - Bloomington
ACCT 2102
Temple University
0:00 / 0:00
Product Costs
Product costs are the costs related to the production of the finished goods and are assigned to the goods themselves. These costs are sometimes referred to as inventoriable costs because the costs are carrying in various inventory accounts.
Accounting for Product Costs
- Direct materials, direct labour and manufacturing overhead are product costs
- Kept in inventories (raw materials, work in process, and finished goods)
- Only expensed when the product is sold, expense is called cost of goods sold.
0:00 / 0:00
Period Costs
Period costs are costs related to the administration of the business and sale of the product, these costs are not related to production.
Accounting for Period Costs
- Expensed in the period the costs are incurred
- Also called Selling and Administrative Expenses
- Marketing expenses
- Sales commissions
- Salaries for administraive office employees
- Administrative office utilities
- Administrative office depreciation
Practice: Product vs Period Costs
Select the best answer(s) for the following questions
Salaries paid to employees working on an assembly line are considered.