Which of the Following Is Included in Inventory Costs

question 60

Multiple Choice

Which of the following is included in inventory costs?

• A) Product costs.
• B) Period costs.
• C) Product and period costs.
• D) Neither product or period costs.

---

Definitions:

Fixed Manufacturing Overhead

The constant production costs that do not vary with the level of output, such as salaries of supervisors and depreciation of equipment.

Variable Manufacturing Overhead

Costs in the production process that change with the volume of production, such as utility costs or raw materials.

Predetermined Overhead Rates

Estimated rates used to allocate overhead costs to products or activities, based on selected bases like labor hours or machine hours.

Machine-Hours

A unit measure representing the operating time of machinery, used in calculating production costs and allocating expenses based on machine usage.