Which of the following is an example of a period cost?
a) Direct materials cost
b) Direct labor cost
c) Rent expense for administrative office
d) Cost of goods sold
b) Direct labor cost
c) Rent expense for administrative office
d) Cost of goods sold
Details:
Period costs are any costs a company incurs indirectly related to the production process. This means they're unrelated to the cost of one product or inventory costs for a business. Therefore, companies include period costs in a financial statement during an assigned accounting period.
