Product Cost versus Period Cost

Product Cost

Product cost consists of cost which have been used in making or acquiring the product. Product costs are included in determining the cost of a product. In a manufacturing business, their period cost consist of direct materials, direct labor and factory overhead. Product cost becomes part of the cost of inventory which is why it is also called inventoriable cost.

Period Cost

Period cost are cost which are not considered as product cost. These costs are charged against revenue for its full amount and are treated as expense without regards to production and sales. This is not part of the cost of inventory. 

Management Accounting

Management Accounting or managerial accounting is the application of accounting information to assist the managers of the entity in making reasonable decisions on achieving the objectives of the entity.

It also refers to reports designed to help the internal users of the entity.

Unlike financial accounting, it does not have principles to follow in preparing reports. The managers are the ones who make rules which they probably think will be the most useful in achieving its objectives.