Identify the following expenses that are period costs: Select all that apply.
Group of answer choices
Accounting software license
Sales staff incentive payments
Depreciation of the administration building
Production supervisor salary
Direct labor overtime premiums
Answer is
· Accounting software licence
· Sales staff incentive payments
· Depreciation of the administrative buildings
Period costs are the costs which are charged to the period in which they are incurred. These costs are not used for inventory valuation purpose. They are charged as operating expenses of running the business. All selling and administrative expenses are period cost. Manufacturing costs are part of product cost. Hence production supervisor salary and direct labor overtime premium which is part of manufacturing overheads is treated as product cost .
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