CFA Practice Question

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CFA Practice Question

Which one of the following items is a period cost?

A. Warranty cost for products sold
B. Rent on a sales office
C. Sales commission expenses
D. Freight-in costs for merchandise inventory
Correct Answer: B

Although a firm establishes a sales office to generate sales, it is difficult to associate the rent on the sales office with any specific sale. Instead, the rent amount is shown as an expense in the period benefited and is a period cost.

User Contributed Comments 4

User Comment
kalps Cannot be asscoiated with particular sale, it is shown in the period benfitted
rocyang overhead
johntan1979 The opposite of product cost
EEEEvia I thought the rent is liability
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