An Example of a Period Cost Is

question 45

Multiple Choice

An example of a period cost is:

• A) fire insurance on a factory building.
• B) salary of a factory supervisor.
• C) direct materials.
• D) rent on a headquarters building.

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Definitions:

Short Run

A period of time during which at least one of a firm's inputs is fixed, affecting the firm's capacity to adjust to demand changes.

Short Run

The short run is a period in economics where at least one factor of production is fixed, limiting the adjustments a firm can make to its inputs.

Average Variable Cost

The total variable cost divided by the quantity of output produced; it shows the cost of producing one more unit of output.

Short Run

A period in which at least one input in the production process is fixed, limiting the ability of the firm to adjust production.