Asked by Angela Patterson on Mar 10, 2024
Verified
Period costs are
A) found on the balance sheet
B) not involved in the production process
C) classified as direct labor, direct material, or factory overhead
D) found on the job order cost sheets
Period Costs
Costs not directly linked to manufacturing and are charged as expenses when they occur, including sales, general, and administrative costs.
Production Process
A sequence of operations that transforms raw materials or components into finished goods or services.
Job Order Cost Sheets
Documents used in cost accounting to record the materials, labor, and overhead costs associated with a specific job or order.
- Comprehend the fundamentals of period costs and their variance from product costs in a manufacturing enterprise.
Verified Answer
MM
Matthew MillerMar 10, 2024
Final Answer :
B
Explanation :
Period costs are not involved in the production process and are expensed in the period they are incurred, rather than being assigned to specific products or units. Examples of period costs include selling and administrative expenses, such as advertising, salaries, rent, and utilities. Period costs are not found on the balance sheet, job order cost sheets, or classified as direct labor, direct material, or factory overhead.
Learning Objectives
- Comprehend the fundamentals of period costs and their variance from product costs in a manufacturing enterprise.