Property taxes on a companys factory building would be class

Property taxes on a company’s factory building would be classified as a(n): Multiple Choice variable cost. period cost. product cost. opportunity cost.

Solution

The right answer is PRODUCT COST.

Explanation: Product cost is the cost that forms part of the cost of goods manufactured. Cost of manufacturing can be direct like material or labour and cost of manufacturing can also be indirect like overheads. Overheads include factory depreciation, rates and taxes etc. Property taxes will form part of overheads and Therefore, property taxes on company factory will be classified as Product cost.