Nunavut (NU) | Ontario (ON) | Prince Edward Island (PEI) | Quebec (QC) | Saskatchewan (SK) | Yukon (YK) |
The existence of external benefit and external cost leads to misallocation of resources. External cost For example, when drivers are not liable for the health damage of car exhaust, drivers will equate only marginal private cost with marginal benefit. But if drivers are forced to pay for the health damage of car exhaust, their marginal cost will go up by the amount of the external cost.
Common examples of period costs include marketing expenses, rent, office depreciation and indirect labor. Even if physical inventories are composed of items that are treated as product costs, the actual administration of warehouses and inventory management expenses are considered period costs. RELATED FAQS.