Question

Columbia Brick, a manufacturing company, prepays its insurance coverage for a 3-year period. The premium for the 3 years is $21,000 and is paid at the beginning of the first year. Three-fourths of the premium relates to factory operations and one-fourth relates to selling and administrative 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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  • CreatedMarch 11, 2015
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