What type of costs are classified as period costs?

Period costs are expenses that are not tied directly to the production of goods and instead relate to a specific time period. These costs are typically associated with the overall operations of a business and include items such as selling, general, and administrative expenses. Unlike product costs, which include costs incurred to manufacture products (such as direct materials and direct labor), period costs are recorded as expenses in the period in which they are incurred, regardless of the production activity.

The correct classification encompasses all costs that are not product-related, effectively capturing a wide range of expenses such as marketing expenses, management salaries, and office rent. This classification is crucial in financial reporting, as it helps differentiate between costs incurred to produce goods and those related to business operations.

In contrast, the other options mention specific costs related to production or goods sold, which are not classified as period costs but rather as product costs. Therefore, recognizing that period costs encompass all costs outside of product costs is essential for accurate financial analysis and reporting.