How would a 5% sales commission paid to sales personnel be classified in a manufacturing company?
A) Fixed, period cost.
B) Fixed, product cost.
C) Variable, period cost.
D) Variable, product cost.
E) Direct labor, product cost.

Question

Quizplus · Accepted Answer

Sales commissions are considered variable costs because they fluctuate with the level of sales. They are classified as period costs because they are expensed in the period in which they are incurred, not tied directly to the production of goods.

How Would a 5% Sales Commission Paid to Sales Personnel