![]() ![]() As such, discretionary expenses rarely have anything to do with a business or household's day-to-day operations and, instead, have to do with lifestyle and choice. These are generally considered wants, while non-discretionary expenses are usually referred to as needs. Examples of period costs include depreciation of factory premises, fixed salary expense, company administration costs, allocated costs from head office, etc. While non-discretionary expenses are considered mandatory-housing, taxes, debt, and groceries-discretionary expenses are any costs incurred above and beyond what is deemed necessary. ![]() Discretionary expenses vary depending on the business or person.Įxpenses are divided into several categories, namely non-discretionary and discretionary.Examples include selling, general and administrative (SG&A) expenses, marketing expenses, CEO salary, and rent expense relating to a corporate office. Understanding Period Costs In managerial and cost accounting, period costs refer to costs that are not tied to or related to the production of inventory. Tracking discretionary expenses enables businesses and households to identify where they can save money in times of financial difficulties. Period costs are also called period expenses.In a corporate environment, discretionary expenses are usually costs linked with improving a company’s reputation among its customers and employees.A discretionary expense is a cost that is not essential for the operation of a home or a business. ![]()
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