D is corrent. Per GAAP, only absorption costing is used for external reporting. Absorption costing considers all manufacturing related costs to be product costs. All of the items listed in this problem are manufacturing costs and, thus, are considered product costs. Therefore, total product cost is $898,000.
A is incorrect. All of the costs are product costs.
B is incorrect. All of the costs are product costs.
B is incorrect. All of the costs are product costs.
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