Expenses,such as utilities,whose benefit is consumed by the passage of time rather than by the level of sales,are known as period costs.

Question

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Period costs are expenses that are not related to the production of goods or services, but instead are related to the passage of time, such as rent, utilities, and salaries. These costs are expensed on the income statement during the period in which they are incurred, regardless of the level of sales.

Expenses,such as Utilities,whose Benefit Is Consumed by the Passage of Time