Which of the following is an example of a period cost in a company that makes clothing?

Select one:

a. Advertising cost for a new line of clothing,

b. Factory supervisor's salary

c. Fabric used to produce men's pants,

d. Monthly depreciation on production equipment,

Expert Solution

Answer- Period costs are the Costs which are not related to the production of the Product. Period costs are not included in the Cost of Inventory and are Expensed in the Period in whch they are Incurred.

In above case the Advertising cost is not Related to the Production of Clothing. Hence it is a Period cost and will be Expensed in the Income statement.

Hence the Correct answer is A) Advertising Cost for a new line of Clothing.

Factory salary , Fabric costing and Monthly depreciation is Related to the Production hence are product costs and Not period costs.

ekkarill92 answered 2 years ago

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