The following is a list of costs that were incurred in the production and sale of large commercial airplanes:a. Annual bonus paid to the chief operating officer of the companyb. Annual fee to a celebrity to promote the aircraftc. Cost of electronic guidance system installed in the airplane cockpitd. Cost of electrical wiring throughout the airplanee. Cost of miniature replicas of the airplane used to promote and market the airplanef. Cost of normal scrap from production of airplane bodyg. Cost of paving the headquarters employee parking loth. Decals for cockpit door, the cost of which is immaterial to the cost of the final producti. Depreciation on factory equipmentj. Hourly wages of employees that assemble the airplanek. Hydraulic pumps used in the airplane’s flight control systeml. Instrument panel installed in the airplane cockpitm. Interior trim material used throughout the airplane cabinn. Masks for use by painters in painting the airplane bodyo. Metal used for producing the airplane bodyp. Oil to lubricate factory equipmentq. Power used by painting equipmentr. Prebuilt leather seats installed in the first-class cabins. Production Quality Control Department costs for the yeart. Salaries of Marketing Department personnelu. Salaries of test pilotsv. Salary of chief financial officerw. Salary of plant managerx. Special advertising campaign in Aviation World magaziney. Turbo-charged airplane enginez. Yearly cost of the maintenance contract for robotic equipmentInstructionsClassify each cost as either a product cost or a period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular headings for your answer, placing an “X” in the appropriate column:Product Costs Period CostsCostDirect Materials CostDirect Labor CostFactory Overhead CostSelling ExpenseAdministrative Expense
The following is a list of costs that were incurred in the production and sale of large commercial
airplanes:
a. Annual bonus paid to the chief operating officer of the company
b. Annual fee to a celebrity to promote the aircraft
c. Cost of electronic guidance system installed in the airplane cockpit
d. Cost of electrical wiring throughout the airplane
e. Cost of miniature replicas of the airplane used to promote and market the airplane
f. Cost of normal scrap from production of airplane body
g. Cost of paving the headquarters employee parking lot
h. Decals for cockpit door, the cost of which is immaterial to the cost of the final product
i.
j. Hourly wages of employees that assemble the airplane
k. Hydraulic pumps used in the airplane’s flight
l. Instrument panel installed in the airplane cockpit
m. Interior trim material used throughout the airplane cabin
n. Masks for use by painters in painting the airplane body
o. Metal used for producing the airplane body
p. Oil to lubricate factory equipment
q. Power used by painting equipment
r. Prebuilt leather seats installed in the first-class cabin
s. Production Quality Control Department costs for the year
t. Salaries of Marketing Department personnel
u. Salaries of test pilots
v. Salary of chief financial officer
w. Salary of plant manager
x. Special advertising campaign in Aviation World magazine
y. Turbo-charged airplane engine
z. Yearly cost of the maintenance contract for robotic equipment
Instructions
Classify each cost as either a product cost or a period cost. Indicate whether each product cost is a
direct materials cost, a direct labor cost, or a factory
cost is a selling expense or an administrative expense. Use the following tabular headings for your
answer, placing an “X” in the appropriate column:
Product Costs Period Costs
Cost
Direct
Materials
Cost
Direct
Labor
Factory
Overhead
Cost
Selling
Expense
Administrative
Expense
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