Managerial Accounting

Classifying Costs The following is a list of costs that were incurred in the production and sale of large commercial airplanes 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 overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Costs Classification a. Salary of chief compliance officer of company b. Power used by painting equipment c. Instrument panel installed in the airplane cockpit Product costs-direct materials cost d. Annual bonus paid to the chief operating officer of the company Product costs-direct labor cost e. Turbo-charged airplane engine Product costs.factory overhead cost f. Interior trim material used throughout the airplane cabin Period cost-selling expense Cost of normal scrap from production of airplane body Period costs-administrative expense h. Hourly wages of employees that assemble the airplane 1. Salary of the marketing department personnel 3. Cost of paving the headquarters employee parking lot k. Cost of electrical wiring throughout the airplane 1. Cost of electronic guidance system installed in the airplane cock m. Salary of plant manager n. Cost of miniature replicas of the airplane used to promote and market the O. Human resources department costs for the year P. Matal ned for producing the plane body A l e to celebrity to promote the aircraft Hidro pumpe used in the airplanet fight control system Yearly cost of the maintenance contract for robotic gument t. Drebul ther tests instiled the first-class cabin u. Debrecation on factory oument w. Oil to lubricate factory equipment X. Masks for use by painters in painting the airplane body y. Decals for cockpit door, the cost of which is immaterial to the cost of the final product 2. Salary of chief financial officer