1 Which of the Following Is a Period Cost

A period cost is any cost that cannot be capitalized into prepaid expenses inventory or fixed assets. Property taxes on corporate headquarters.

Ira Kulkarni This Video Explains The Difference Between Product Cost And Period Cost With Examples It Also Goes Over Eac Visual Learners Period How To Split

Fabric used to produce mens pants.

. Chapter 1 Review 1. Any costs for the sales and marketing department on a product also under this category. Depreciation of a machine used in manufacturing 7.

Depreciation on factory equipment is not a period cost as it is related to the manufacturing of a product and should be classified as a product cost. Some examples of period. A period cost is more closely associated with the passage of time than with a transactional event.

Expert Answer 100 1 rating Period cost of a company are those costs which are not related to manufacturing process of the company. Period costs are costs that cannot be capitalized on a companys balance sheet Balance Sheet The balance sheet is one of the three fundamental financial statements. Which of the following is an example of a period cost in a company that makes clothing.

Sign up to view the full answer View Full Answer Why Join Course Hero. A period cost or expense is the amount that is spent when incurred and appears on the income sheet. A Product costs b Direct costs c Indirect costs d Period costs 5.

Raw materials purchased during the period. Advertising cost for a new line of clothing. Which of the following is a period cost.

If the answer is no then the cost is a period cost. Cost of merchandise purchased. Electrical costs to light the production facility.

5A product cost is deducted from revenue in the period in which. Since a period cost is essentially always charged to expense at once it may more appropriately be called a period expense. View the full answer Transcribed.

The August budget is based on 20000 hours of planned machine time. AWhether a particular cost is classified as direct or indirect does not depend on the cost object. Monthly depreciation on production equipment.

General administrative expenses salary of the office staff rent of. Which of the following is considered a period cost. The formula for calculating the variable overhead total variance is.

None of the above is considered a period cost. Transportation cost on goods received from suppliers. Costs that are taken directly to the income statement as expenses in the period in which they are incurred are.

5 A The production process is completed. In accumulating raw materials costs companies debit the cost of raw materials purchased in a perpetual system to. Depreciation of the equipment used in factory maintenance is not a period cost.

Deprecation of a machine used in manufacturing d. A period cost is also known as period expenses it is a cost incur during a period when a business has no production or business activities it is a type of cost that cannot be recorded as production asset production inventory prepaid expenses period cost are easily linked with accounting period and time than being linked with any production. Current years depreciation on a firms manufacturing facilities.

Promoting the units of sales and other activities are period costs. The following illustrates costs incurred by a manufacturing company in the first year of operations. Period cost are those costs that are not related to the manufacturing process.

Maintenance cost expected to be incurred during August is. The cost of products sold to customers of an apparel store. A non period cost will be labor or materials because the amount will change as your production changes.

Therefore period costs are listed as an expense in. Period costs noninventoriable costs all costs in the income statement other than cost of goods sold administrative marketing treated as expenses of the accounting period in which they are incurred for manufacturing companies all non-manufacturing costs are period costs. Period costs are closely associated with the time passage and cannot be capitalized into prepaid expenses fixed assets or inventory.

Example of Period Costs. Which of the following costs would be considered a period rather than a product cost in a manufacturing company. Each of the following would be a period cost except.

A direct cost is one that can be easily traced to the particular cost object. Consider the following cost items. The cost of a general accounting office c.

A Is not worth the effort of tracing to a specific cost object b Remains constant no matter the activity level. The period costs are the one which has the support for the production and sales of the company. Apr 15 2010 1242 PM A period cost is Rent because the amount does not change with a change in production and it is an amount that is charged whether you produce anything.

Period costs solely account for sales general and administrative SGA costs for your organization. Which of the following is a period cost rather than a product cost of a manufacturer. Year-end completed production of a carpet manufacturer.

Jobs in Abu Dhabi. A direct cost is one which. Sales commissions earned by a companys sales force.

Administrative salaries expense for the current month. Period costs are not assigned to one particular product or the cost of inventory like product costs. Jumpst Corporation uses the cost formula Y 3600 030X for the maintenance cost in Department B where X is machine-hours.

Costs expensed on the income statement in the accounting period incurred are referred to as a. If your company operates in a corporate setting and has a separate manufacturing facility then the cost of the corporate office is a period cost. CThe factory managers salary would be classified as an indirect cost of producing one unit of product.

The salary of the company presidents secretary b.

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