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A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $4,500 and is paid at the beginning
A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $4,500 and is paid at the beginning of the first year. Eighty percent of the premium applies to manufacturing operations and twenty percent applies to selling and administrative activities. What amounts should be considered product and period costs respectively for the first year of coverage?
Product Period
A) $ 300$ 1,200
B) $ 1,500 $ 0
C) $ 0 $ 1,500
D) $ 1,200 $ 300
Which option shall I choose?
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