Costs that are expensed in the period in which they are incurred are called:
A)Direct materials costs
B)Product costs
C)Noninventoriable costs
D)Inventoriable costs

Question

Quizplus · Accepted Answer

Noninventoriable costs, also known as period costs, are expensed in the period in which they are incurred. Examples of noninventoriable costs include selling and administrative expenses, such as rent, utilities, and salaries. Direct materials costs and product costs are inventoriable costs, which are capitalized and included in the cost of goods sold when the product is sold.

Costs That Are Expensed in the Period in Which They