Question

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?

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.