actures custom-made machinery routinely incurs sizable telephone from customers. Which of the following is a proper 3. A company which manufactures custom-made costs in the process of taking sales orders from customers. W classification of this cost? A. Product cost B. Period cost C. Conversion cost D. Prime cost manufacturing plant is generally considered to be a: 4. The cost of fire insurance for a manufacturing plant is generally A. product cost. B. period cost. C. variable cost. D. all of these. 5. Which of the following costs is both a prime cost and a conversion A. direct materials B. direct labor C. manufacturing overhead D. administrative costs 6. Property taxes on the manufacturing facility are an element of Conversion Cost Period Cost No No No Yes Yes No Yes Yes A. Option A B. Option B C. Option D. Option D 7. The cost of the direct labor will be treated as an expense on the income statement when the resulting: A. payroll costs are paid. B. payroll costs are incurred. C. products are completed. D. products are sold