Imagine you own a lemonade stand. The lemons and sugar you buy? Those are product costs—they go into the lemonade you actually sell. Period costs, on the other hand, are the silly, necessary nonsense that happens regardless of how many cups you pour.
Think of your office rent, the salary you pay that one guy who “manages synergy,” and the giant banner you bought that says “Best Lemonade in Town.” Spoiler: That banner won’t make the lemonade taste better. But you still pay for it! Period costs are all expenses that aren’t directly tied to making your product—they’re tied to a time period, like a month or a year.
