Property taxes for the entire manufacturing facility, including the front office and factory area are
A)Both fixed and variable product costs.
B)Both direct and indirect costs.
C)Both a product and a period cost.
D)None of the above.

Question

Quizplus · Accepted Answer

Property taxes are a fixed cost that is incurred over a period of time (a period cost) rather than directly tied to the production of products (a product cost). However, property taxes apply to the manufacturing facility as a whole, including both the front office and factory area, which makes them a mix of both product and period cost.

Property Taxes for the Entire Manufacturing Facility, Including the Front