6 statement when 8. The cost of manufacturing finished goods inventory moves from the balance sheet to the income a. direct materials are purchased b. production is finished c. finished goods are sold d. goods are moved from one work station to another 9. Product costs will be found on which financial statement(s)? a. income statement b. balance sheet c. both a. and b. d. none of the above 10. Why is it important to determine if a cost is a product cost or period cost? a. period costs are always more expensive than product costs b. product costs are expensed when incurred c. product costs first become part of inventory and then are expensed when they are sold d. period costs are expensed when they are sold 3. Manufacturing Costs Flow Beginning raw materials inventory was $34,000. During the month, $290,000 of raw material was purchased. An account at the end of month revealed that $26,000 of raw material was still present. What is a cost of direct material used? Solution: Direct materials used in production totaled $380,000. Direct labor was $425,000 and factory overhead was $195,000. What were total manufacturing costs incurred for the month? Solution