A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $3,000 and is paid at the beginning of the first year. Three-fourths of the premium applies to factory operations and one-fourth applies to selling and administrative activities. What amounts should be considered product and period costs respectively for the first year of coverage?
|
|
Product
|
Period
|
|
A)
|
$1,000
|
$0
|
|
B)
|
$250
|
$750
|
|
C)
|
$2,250
|
$750
|
|
D)
|
$750
|
$250
|