When manufacturing products, which of the following is an example of a period cost?
A) Advertising expense
B) Depreciation expense on factory equipment
C) Indirect materials used in the factory
D) Property taxes on the plant

Question

Quizplus · Accepted Answer

Period costs are expenses that are not directly related to the production of a specific product, but rather to the overall functioning of the business. Advertising expense is an example of a period cost because it is a cost incurred to promote the business as a whole, rather than to produce a specific product. Depreciation expense on factory equipment, indirect materials used in the factory, and property taxes on the plant are all examples of product costs, as they are directly related to the production of specific products.

When Manufacturing Products, Which of the Following Is an Example