CIMA BA2 · Chapter 2 · Question 6 of 8
In a company that uses absorption costing, which of the following would be treated as a PERIOD cost rather than a product cost?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Salaries of the delivery van drivers
Explanation
Product costs are those included in inventory valuation, which under absorption costing means all production costs (direct and production overhead). Delivery costs are distribution costs and are charged against profit in the period in which they are incurred, so they are period costs.
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