Reference:
Tech Computer manufactures computers in its plant located in Toronto and then ships the computers directly to distributors and retailers. The company's accountant has enlisted you to classify the following company's expenses:
-Cost of a warehouse (i.e. used to store finished goods (computers)prior to selling them to the customer.
A)Variable product cost.
B)Variable period cost.
C)Fixed product cost.
D)Fixed period cost.

Question

Reference: 
Tech Computer manufactures computers in its plant located in Toronto and then ships the computers directly to distributors and retailers. The company's accountant has enlisted you to classify the following company's expenses:
-Cost of a warehouse (i.e. used to store finished goods (computers)prior to selling them to the customer.
A)Variable product cost.
B)Variable period cost.
C)Fixed product cost.
D)Fixed period cost.

Quizplus · Accepted Answer

The cost of a warehouse used to store finished goods is a fixed period cost because it does not vary with the level of production and is incurred over a specific period of time, regardless of the company's production volume.

Reference: Tech Computer Manufactures Computers in Its Plant Located in Toronto