Which term describes the costs of products manufactured and sold by a company?

The term that best describes the costs of products manufactured and sold by a company is "Product Costs." Product costs include all expenses directly tied to the production of goods. This encompasses direct materials and direct labor involved in manufacturing, as well as any overhead costs associated with the manufacturing process. Essentially, these costs are integral to creating a product and are historically recorded as inventory on the balance sheet until the product is sold, at which point they are recognized as an expense on the income statement (Cost of Goods Sold).

In contrast, period costs refer to expenses that are not directly tied to the production of goods, such as administrative or selling expenses. Direct costs are those that can be directly traced to a specific product, but this term is broader and does not encompass indirect costs associated with manufacturing. Indirect costs include overhead expenses that cannot be directly linked to a specific product, such as utilities or rent for the manufacturing facility. Therefore, "Product Costs" accurately conveys the specific costs associated with the production and sale of goods, making it the most appropriate choice.