The Flow of Manufacturing Costs –Another Cost Classification Scheme for Manufacturing FirmsProduct Costs vs. Period Costs●Product Costs:Sum of the direct and indirect costs that are assigned (traced and allocated) to a product. Product costs "attach“ to the product and areincluded in the cost of inventory. ●Period Costs:All other operating costs. Period costs are expensedin the same period in which they are incurred. Thus, they are not included in the valuation of inventory.
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