Question

Period costs are cost

• A. Variable
• B. Fixed
• C. Over head
• D. Prime

Answer 1

Answer:

B. Fixed

Period costs are costs that are not directly tied to the production of goods and are incurred over a period of time. Examples: Rent, Salaries of office staff, Depreciation of office building. These costs are generally fixed in nature, i.e., they remain constant irrespective of the level of production. Other options: Variable costs: Change with production level (e.g., raw materials, direct labor). Overhead: Can include both fixed and variable components. Prime cost: Direct costs of production (Direct materials + Direct labor).