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

question 58

True/False

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.

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Definitions:

Depreciation Expense

Distributing the cost of a physical asset methodically over the time it is useful.

Direct Labor

The labor or workforce directly involved in the production of goods or providing services, considered a variable cost in manufacturing.

Factory Overhead

All indirect costs incurred during the production of goods, such as utilities, depreciation, and salaries of maintenance employees.

Direct Materials

Basic substances used in the direct creation of particular products or services.