Question

Mark is an engineer who has designed a telecommunications device. He is convinced that there is a big potential market for the device. Accordingly, he has decided to quit his present job and start a company to manufacture and market the device. The salary that Mark earns at his present employ is:

Answer 1

Answer:

the answer is period cost

Answer 2

Answer:

a period cost.

Explanation:

Rent on the administrative office space is a period cost.

Period costs are non-manufacturing costs and are expensed in the period in which they are incurred.

Rent on the administrative office space is a selling and administrative cost and thus a period cost.