Asked by Mafutaga Tagoai on Jul 13, 2024
Verified
Which of the following statements about product costs is true?
A) Product costs are deducted from revenue when the production process is completed.
B) Product costs are deducted from revenue as expenditures are made.
C) Product costs associated with unsold finished goods and work in process appear on the balance sheet as assets.
D) Product costs appear on financial statements only when products are sold.
Balance Sheet
A financial statement that summarizes a company's assets, liabilities, and equity at a specific point in time.
Product Costs
The total expenses involved in manufacturing a product, including direct labor, direct materials, and manufacturing overhead.
Revenue
The total amount of money generated from the sale of goods or services before any expenses are subtracted.
- Identify the impact of cost behavior on decision-making and financial performance.
Verified Answer
SF
Stephy FurretJul 18, 2024
Final Answer :
C
Explanation :
Product costs associated with unsold finished goods and work in process appear on the balance sheet as assets. This is because product costs are considered a part of inventory until the products are sold, at which point they are expensed as Cost of Goods Sold.
Learning Objectives
- Identify the impact of cost behavior on decision-making and financial performance.
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