In a manufacturing company which of the following is a product cost as it relates to

inventory?

a.

Selling costs.

b.

Interest costs.

c.

Raw materials.

d.

storage costs.

Please explain why

When funds are borrowed to pay for construction of assets that qualify for capitalization of interest, the excess funds not needed to pay for construction may be temporarily invested in interest-bearing securities. Interest earned on these temporary investments should be

a.

offset against interest cost incurred during construction.

b.

used to reduce the cost of assets being constructed.

c.

multiplied by an appropriate interest rate to determine the amount of interest to be

capitalized.

d.

recognized as revenue of the period