Question

Which of the following is a period cost for a manufacturing​ company? A. Wages of factory...

Which of the following is a period cost for a manufacturing​ company?

A. Wages of factory janitor

B. Raw materials

C. Insurance cost of production equipment

D. Office rent

I'm pretty sure the correct answer is C but there i'm finding different answers online. Need confirmation.

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Answer #1

Answer- The following is a period cost for a manufacturing​ company = Office rent.

Explanation- Period costs are those costs which are not included in the product costs. Usually these costs are not part of the manufacturing process and therefore treated as expense for the period in which they arise.

Example of period costs includes office rent, interest, depreciation, sales commission and advertising expense etc.

Wages of factory janitor, raw materials and insurance cost of production equipment are product costs.

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