What is characteristic of a period cost?
A)They include selling costs and administrative costs.
B)They are used to compute product cost.
C)They can be included in overhead costs.
D)They are carried in inventory until the goods are sold.

Question

Quizplus · Accepted Answer

Period costs are expenses that are not directly related to the production process or the cost of goods sold. They include selling costs, such as advertising and sales commissions, and administrative costs, such as salaries and office expenses. These costs are expensed in the period in which they are incurred, rather than being included in the cost of goods sold or carried in inventory.

What Is Characteristic of a Period Cost