Define product cost. Describe three different purposes for computing product costs.

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Part $1$

A$.$

A product cost is the sum of all manufacturing costs other than direct materials assigned to a product. Purposes for computing a product cost include$(1)$ analyzing fluctuations in the$$ non$-$material costs of a$$ product, $(2)$ product pricing$$ decisions, and$(3)$ preparing financial statements for internal reporting purposes.

B$.$

A product cost is the sum of all indirect costs assigned to a product. Purposes for computing a product cost include$(1)$ valuing$$ inventory, $(2)$ product mix$$ decisions, and$(3)$ analyzing production efficiencies.

C$.$

A product cost is the sum of all direct material costs and direct labor costs assigned to a product. Purposes for computing a product cost include$(1)$ choosing a supplier with competitive$$ prices, $(2)$ employee$$ wage$-$rate analysis, and$(3)$ analyzing fluctuations in material and labor costs.

D$.$

A product cost is the sum of the costs assigned to a product for a specific purpose. Purposes for computing a product cost include$(1)$ pricing and product mix$$ decisions, $(2)$ contracting with government$$ agencies, and$(3)$ preparing financial statements for external reporting under GAAP.