Chapter 19, Problem 2DIE

To determine

Period Cost: The cost incurred after the goods are produced is called period cost. It includes shipping, selling and office expenses.

Product cost: Product cost is the total quantitative value of all the efforts and resources employed in for production. It includes all types of materials and human efforts used by a business. The types of product costs are:

• Direct Materials: At the time of manufacturing, material which is directly related to the finished goods is known as direct material.
• Direct Labor: The amount paid to the labors, directly associated with the process of conversion of the raw material into finished goods, is known as direct labor.
• Manufacturing Overheads: The cost which is indirectly related to the production is known as manufacturing overheads.

To Identify: The type of costs, given in the question.