Which of the following costs is an example of a period rather than a product cost?
A)Depreciation on production equipment.
B)Wages of salespersons.
C)Wages of production machine operators.
D)Insurance on production equipment.

Question

Quizplus · Accepted Answer

Wages of salespersons are an example of a period cost because they are incurred in the selling and administrative activities of the company, rather than in the production of goods. Period costs are expensed in the period in which they are incurred, rather than being included in the inventory cost of the product. Depreciation, wages of production machine operators, and insurance on production equipment are all examples of product costs, as they are directly related to the production of goods.

Which of the Following Costs Is an Example of a Period