Question

Period costs for a manufacturing company would flow directly to:

Answer 1

Answer: The income statement as an expense.

Explanation:

Period costs are the costs that can't be capitalized on the balance sheet of a company. They are expensed during the time incurred and are shown on the income statement. They are also known as period expenses and are associated with passage of time.

Administrative activities are form of period costs because they are incurred on a daily basis. Examples of period costs include administrative and general expenses, like office supplies, rent, office depreciation, and utilities.