Introduction to 1c: Product versus Period Cost

This lesson discusses the segregation of costs into the mutually exclusive categories of product versus period. All organizations that have any costs have period costs. Product costs only exist for those organizations that build their own inventory.

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Learning Objectives

After completing this lesson, you should be able to

• distinguish between manufacturing, merchandising, and service firms; and
• describe the difference between product costs (inventoriable meaning asset) and period costs (expenses).

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