Which of the following statements about period costs is true?

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  1. Which of the following statements about period costs is true?
    a. Period costs are included in inventories on the balance sheet.
    b. Period costs are included in the cost of goods sold on the income statement.
    c. Period costs are subtracted as expenses on the income statement during the current period.
    d. Period costs are included in the statement of the cost of goods manufactured.

  2. Which of the following statements about period costs is true?
    a. Period costs are not included in inventories on the balance sheet.
    b. Period costs are included in the cost of goods sold on the income statement.
    c. Period costs are not subtracted as expenses on the income statement during the current period.
    d. Period costs are included in the statement of cost of goods manufactured.

  3. Steel used to make the front and sides of an office desk is which of the following?
    a. Direct material cost
    b. Indirect material cost
    c. Manufacturing overhead cost
    d. Period cost

  4. Activity based costing was developed to do which of the following?
    a. Reduce direct material costs
    b. Increase sales of the product
    c. Compute more accurate product costs
    d. Reduce administrative salaries