Product Cost

Production costs are costs attached to the inventory and recorded in the inventory account. These costs are directly related to the transfer of the goods to the buyer's site and modifiers to the condition that the goods are ready for sale. Expenses such as this covers the cost of transporting the goods purchased, other direct purchase costs, and labor costs as the production of other goods dikeluarka in the process when it is sold.
It also seemed appropriate to allocate part of any fees or expenses purchasing department purchasing, storage costs, and other costs incurred in inventory before being sold. However, because of the practical difficulties in allocating such costs and expenses, the items are usually not included in the valuation of inventory.

Cost of manufacturing companies include direct material costs, direct labor, and manufacturing overhead. Manufacturing overhead costs include indirect materials, indirect labor, and other costs such as depreciation, taxes, insurance, and electricity.