PR 15-1A Classifying costs Obj. 2 The following is a list of costs that were incurred in the production and sale of large commer- cial 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. Depreciation on factory equipment J. Hourly wages of employees that assemble the airplane K. Hydraulic pumps used in the airplane's flight control system 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 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 overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular head- ings for your answer, placing an "X" in the appropriate column: Product Costs Period Costs Direct Direct Factory Materials Labor Overhead Selling Administrative Cost Cost Cast Cost Expense Expense