Which of the following would be considered a period cost for a textbook printing company?

• A. Salaries of sales staff
• B. Depreciation on printing equipment
• C. Paper used in printing textbooks
• D. Wages of machine operators

Answer: (A)

Verified step by step guidance

1. Understand the concept of period costs: Period costs are expenses that are not directly tied to the production process. These costs are incurred over a specific period and are typically associated with selling, administrative, or general business operations.
2. Analyze each option provided in the problem: Determine whether each cost is related to production or falls under selling and administrative expenses.
3. Option 1: Salaries of sales staff - This is a selling expense and is considered a period cost because it is not directly tied to the production of textbooks.
4. Option 2: Depreciation on printing equipment - This is a production-related cost because the equipment is used in the manufacturing process. It is classified as a product cost, not a period cost.
5. Option 3: Paper used in printing textbooks and Option 4: Wages of machine operators - Both are directly tied to the production process and are considered product costs, not period costs.