Product Costs Are Converted from Cost to Expense When

question 54

Multiple Choice

Product costs are converted from cost to expense when

• A)units are completed.
• B)materials are purchased.
• C)units are sold.
• D)materials are requisitioned.

---

Definitions:

LIFO Reserve

The difference between the cost of inventory calculated using the Last-In, First-Out (LIFO) method and the cost calculated using the First-In, First-Out (FIFO) method.

FIFO Costing

First-In, First-Out, an inventory valuation method that assumes that the first items placed in inventory are the first sold.

Cost of Goods Sold

The total direct costs attributable to the production of goods sold by a company, including materials and labor expenses.

Ending Inventory

The total value of goods available for sale at the end of an accounting period after accounting for purchases and sales.