Question: Costs are divided into two categories; they are treated differently for purposes of accounting : 1. product costs those that are associated with the production

Costs are divided into two categories; they are treated differently for purposes of accounting :

1. product costs —those that are associated with the production of products, and 2. period costs —those that are associated with the sales and general activities of the accounting period.

For example, the cost of heating the offices of the sales department would be considered a [product / period] cost. The cost of heating the production plant itself would be a [product / period] cost.

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