Inventoriable Costs

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Inventoriable costs, also known as product costs, encompass all expenses directly attributable to the acquisition or production of goods intended for sale. These costs include direct materials, direct labor, and manufacturing overhead. Inventoriable costs are capitalized as inventory on the balance sheet until the goods are sold, at which point they are expensed as cost of goods sold. Understanding inventoriable costs is crucial for accurate financial reporting and inventory valuation.

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