PRODUCT COSTS



Product (Inventoriable) Costs:
  •  These are the costs which are associated with the purchase and sale of goods (in the case of merchandise inventory).
  •  In the production scenario, such costs are associated with the acquisition and conversion of materials and all other manufacturing inputs into finished product for sale.
  •  Hence, under marginal costing, variable manufacturing costs constitute inventoriable or product costs.
  • Finished goods are measured at product cost. Work-in-process (WIP) inventories are also measured at product cost on the basis of percentage of completion.

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