Which of the Following Statements Concerning Product and Period Costs

question 35

Multiple Choice

Which of the following statements concerning product and period costs is incorrect?

• A) Service businesses have both period and product costs.
• B) Period costs are not directly required to produce the product.
• C) Product costs are included in the cost of inventories until the products are sold.
• D) The basis of the distinction between product and period costs is the timing of the recognition of an expense in the income statement.

---

Definitions:

Alienate People

To cause individuals to feel isolated or estranged, often as a result of actions or policies that are perceived as unfriendly or unrelatable.

Modified Rebuy

A purchasing situation where a buyer reorders a product with minor modifications or adjustments.

Specifications

Detailed descriptions of the design, materials, and performance criteria for products or projects.

Quality

The measure of excellence or state of being free from defects, deficiencies, and significant variations, brought about by strict adherence to measurable and verifiable standards to meet customer expectations.