Is indirect labor a period cost?

Understand the Problem

The question is asking whether indirect labor is classified as a period cost in accounting, which involves understanding standard definitions and classifications of costs.

More Information

Indirect labor cost is considered a period cost because it is not directly accrued from the production of goods. Instead, it is part of non-production expenses such as wages for indirect labor, rent, and advertisement expenses.

Tips

A common mistake is confusing indirect labor costs with product costs. Remember, product costs are directly tied to the production of goods.

Sources

• Indirect Labor Definition & Examples - study.com
• Period Costs vs. Product Costs: What's the Difference? - investopedia.com