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Q. Define the Product costs?
Product costs are costs earns in the acquisition or manufacture of goods. Since you will see in the next section included as product costs for purchased goods are freight, invoice and insurance-intransit costs. For manufacturing companies product costs comprise all costs of labour, materials and factory operations necessary to produce the goods. Product costs put together to the goods purchased or produced and remain in inventory accounts as long as the goods are on hand. We allege product costs to expense when the goods are sold. The result is a accurate matching of cost of goods sold expense to its related revenue.
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