Question

Product costs: Select one: a. Are expenditures necessary and integral to finished products. b. Are expenditures identified more with a time period rather than with units of product. c. Include selling and administrative expenses. d. Are expensed on the income statement when incurred. e. Are moved to the income statement for any unsold inventory at the end of the year.

Answer 1

Answer:

a. Are expenditures necessary and integral to finished products

Explanation:

Product cost includes those cost which is used to make the finished product. It is a combination of the direct cost of materials, the direct cost of labor, and overhead cost of production

In mathematically,  

Product cost = Direct materials cost + Direct labor cost + manufacturing overhead  cost

So, It is a mix of direct material cost, direct labor cost., and the manufacturing overhead cost.