Final answer:
Property taxes on a manufacturing plant are considered part of the cost of production and therefore are a product cost (a. Product cost YES, Period cost NO). They are included in manufacturing overhead, which is allocated to the production of goods.
Step-by-step explanation:
Property taxes on a manufacturing plant are typically considered a fixed cost associated with the property itself and are an element of a product's cost, since they are part of the overhead that is allocated to the production of goods. The specific answer to whether property taxes on a manufacturing plant are a product cost or a period cost is a. Product cost YES, Period cost NO. This is because product costs include all costs that are directly tied to the creation of products, such as material, labor, and manufacturing overhead, which includes property taxes for the manufacturing site.
It's important to recall that the manufacturing overhead is part of the overall cost of production, and these taxes are considered part of those ongoing costs necessary to produce the product. When a company owns a factory, the associated property taxes are part of these fixed manufacturing overhead costs and do not vary with the level of production. Hence, when calculating the cost of goods sold, property taxes would be included as part of the product cost, ensuring that the cost of production accurately reflects all expenses required to produce items.