Question

Property taxes on a manufacturing plant should be classified as which type of cost?

A. a product cost but not a period cost
B. both a period cost and a product cost
C. a period cost but not a product cost
D. neither a period cost nor a product cost

Answer 1

A.

Step-by-step explanation:

Property taxes on a manufacturing plant should be classified as a product cost but not a period cost. This is because product costs refers to the costs that you have to pay in order to continue production. This costs include labor, supplies, utilities, materials and even property taxes to maintain the facility open. While period costs refers to selling various other expenses taken on by administration but does not include property taxes.