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

A sales commission is a variable cost because the amount paid changes with the level of sales. It is also a period cost, as it is incurred during the period in which sales are made, rather than being directly tied to the production of a specific product. Therefore, the 5% sales commission paid to sales personnel would be classified as a variable, period cost.

How Would a 5% Sales Commission Paid to Sales Personnel