Period costs for a manufacturing company flow directly to:
A)The income statement as an expense.
B)Factory overhead.
C)The balance sheet as inventory.
D)Cost of goods sold on the income statement.
E)The current schedule of cost of goods manufactured.

Question

Quizplus · Accepted Answer

Period costs are not directly related to the production of goods and are expensed on the income statement when incurred. They do not affect inventory, cost of goods sold, or the schedule of cost of goods manufactured. Therefore, they flow directly to the income statement as an expense.

Period Costs for a Manufacturing Company Flow Directly To