Answer :
Product costs are sometimes called inventoriable costs because of the below-mentioned reason.
Product costs are assigned to units as they are processed, and thus inventories are included.
Product costs become cost of goods sold on the income statement at the point of sale.
The product cost is whatever the company paid for its goods.
In a manufacturing company's external financial reports, product costs include all manufacturing costs.
Direct materials, direct labor, and manufacturing overhead flow to Work in Process inventory.
As goods are completed, their cost is transferred from Work in Process inventory to Finished Goods inventory.
When goods are sold, their cost is deducted from the Finished Goods inventory and added to the Cost of Goods Sold.
On the income statement, the Cost of Goods Sold is an expense.
Hence, product costs are sometimes called inventoriable costs.
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