Let’s say you finally sell those stress balls. Hooray! But then you have to ship them. Shipping costs—like FedEx fees or the salary of the guy who packs the boxes—are period costs. They’re not part of the product itself; they’re the price of getting the party started at the customer’s doorstep.
I once paid $50 to ship a $10 stress ball across the country. That’s not accounting; that’s chaos with a receipt. But hey, it’s a period cost, and I slept fine because I expensed it right away. Moral of the story: shipping is expensive, but at least your accountant won’t yell at you for capitalizing it.
What is the difference between period costs and product costs
Depreciation of Office Equipment (The Boring One, I Promise)
Remember that fancy printer you bought that now jams every other page? Its depreciation—the slow death of value over time—is a period cost for the office equipment. You don’t chop it up and add it to your product; you just write off a little each year. It’s like watching your youth fade, but with more paper jams.
And yes, even the coffee machine’s depreciation counts. So basically, every time you brew a pot, you’re sipping on a period cost. Drink up—it’s the most delicious expense you’ll ever have.
