Question

The following information relates to Webster? Inc.: Advertising Costs ?$10,570 Administrative Salaries ?26,700 Delivery Vehicle Depreciation...

The following information relates to Webster? Inc.:

Advertising Costs

?$10,570

Administrative Salaries

?26,700

Delivery Vehicle Depreciation

?1,027

Factory Repair and Maintenance

910

Indirect Labor

?11,700

Indirect Materials

?9,360

Manufacturing Equipment Depreciation

?2,080

Office Rent

?61,100

?President's Salary

?40,300

Sales Revenue

?450,000

Sales Salary

?4,500

How much were? Webster's period? costs?

Homework Answers

Answer #1

Period costs:

The costs that are not included in product costs are known as period costs. Usually, these costs are not part of the manufacturing process and are therefore treated as expense for the period in which they arise.

Period costs are not attached to products and company does not need to wait for the sale of products to recognize them as expense. According to generally accepted accounting principles (GAAP), all marketing, selling and administration costs are treated as period costs. Examples of these costs include office rent, interest, depreciation of office building, sales commission and advertising expenses etc.

Webster's period Cost Would ?be 618517, That is total of all the given information items.
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