Asked by Arthur Brooks on May 17, 2024
Verified
Direct labor cost is an example of a period cost.
Period Cost
Costs that are not directly tied to the production process and are expensed in the period in which they are incurred, such as selling, general, and administrative expenses.
Direct Labor Cost
The wages of factory workers who are directly involved in converting materials into a finished product.
- Recognize the categorization of costs as period or product costs and their implications on financial statements.
Verified Answer
AP
Alexandre PapadopulosMay 20, 2024
Final Answer :
False
Explanation :
Direct labor cost is a product cost, as it is directly related to the production of goods. Period costs, on the other hand, are associated with time periods such as salaries, rent, and advertising expenses.
Learning Objectives
- Recognize the categorization of costs as period or product costs and their implications on financial statements.