A manufacturing company prepays its insurance coverage for a three-year period.The premium for the three years is $2,700 and is paid at the beginning of the first year.Eighty percent of the premium applies to manufacturing operations and 20% applies to selling and administrative activities.What amounts should be considered product costs and period costs respectively for the first year of coverage?
$\begin{array}{|l|r|r|}
\hline & \text { Product Costs } & \text { Period Costs } \
\hline \text { A) } & \$ 2,700 & \$ 0 \
\hline \text { B) } & \$ 2,160 & \$ 540 \
\hline \text { C) } & \$ 1,440 & \$ 360 \
\hline \text { D) } & \$ 720 & \$ 180 \
\hline
\end{array}$
A) Option A
B) Option B
C) Option C
D) Option D

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The Answer of A manufacturing company prepays its insurance coverage for a three-year period.The premium for the three years is $2,700 and is paid at the beginning of the first year.Eighty percent of the premium applies to manufacturing operations and 20% applies to selling and administrative activities.What amounts should be considered product costs and period costs respectively for the first year of coverage?
$\begin{array}{|l|r|r|}
\hline & \text { Product Costs } & \text { Period Costs } \
\hline \text { A) } & \$ 2,700 & \$ 0 \
\hline \text { B) } & \$ 2,160 & \$ 540 \
\hline \text { C) } & \$ 1,440 & \$ 360 \
\hline \text { D) } & \$ 720 & \$ 180 \
\hline
\end{array}$
A) Option A
B) Option B
C) Option C
D) Option D

A Manufacturing Company Prepays Its Insurance Coverage for a Three-Year