Which of the following accounts would be a period Cost rather than a product cos

Question

Which of the following accounts would be a period Cost rather than a product cost? A.freight cost B.direct labor C. Production managers salary D.maintenance on factory machines E. Depreciation on manufacturing machinery Which of the following accounts would be a period Cost rather than a product cost? A.freight cost B.direct labor C. Production managers salary D.maintenance on factory machines E. Depreciation on manufacturing machinery A.freight cost B.direct labor C. Production managers salary D.maintenance on factory machines E. Depreciation on manufacturing machinery

Explanation / Answer

Answer:-The following accounts would be a period Cost rather than a product cost:-Freight cost (Option A).

Explanation:- Period costs are basically all costs other than product costs. These are not incurred on the manufacturing process and therefore these cannot be assigned to cost goods manufactured. Period costs are thus expensed in the period in which they are incurred.

Example of period costs are advertising, sales commissions, office supplies, office depreciation, legal and research and development costs.

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