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LO5. Columbia Brick , a manufacturing company , prepays its insurance coverage for a three-year period. The premium for the three years is $21,000 and

LO5.Columbia Brick, amanufacturing company, prepaysits insurance coveragefor a three-year period. Thepremiumfor thethree yearsis$21,000and ispaidat thebeginningof thefirst year.Three-fourths of thepremium relatestofactory operationsandone-fourth relatestosellingandadministrative activities.

Required.

A.calculate the amount of the premium that should be recorded as a product cost each year

B.calculate the amount of the premium that should be recorded as a period cost each year.

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