Question

Seth Company manufactures financial calculators. Which ONE of the following is NOT a PERIOD cost?

Property taxes on the executive office building

Depreciation on the automobiles used by the company salespersons

Cost of the electricity used in the executive officers’ copy room

Wages of the janitors in the executive office building

Salary of the chief financial officer

Bonuses paid to the calculator assemblers who work on the production line

Wages paid to typesetters in the company’s advertising department

Commissions paid to company salespersons

Answer 1

Period cost are cost which are not directly related to product production.These cost are expensed in profit and loss account.For ex: Cost related to sales ,Executive office cost,Advertisement costs etc.

Property taxes on the executive office building:-Period Cost

Depreciation on the automobiles used by the company salespersons:- Period cost

Cost of the electricity used in the executive officers’ copy room:- Period cost

Wages of the janitors in the executive office building:- Period cost

Salary of the chief financial officer:- Period cost

Bonuses paid to the calculator assemblers who work on the production line:- Not Period cost

Wages paid to typesetters in the company’s advertising department:-Period cost

Commissions paid to company salespersons:- Period cost

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