Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help finance its growth. The bank requires financial statements before approving the loan. Required: Classify each cost listed below as either a product cost or a period cost for the purpose of preparing financial statements for the bank. Costs Product Cost/ Period Cost 1. Depreciation on salespersons' cars 2. Rent on equipment used in the factory. 3. Lubricants used for machine maintenance 4. Salaries of personnel who work in the finished goods warehouse. 5. Soap and paper towels used by factory workers at the end of a shift. 6. Factory supervisors' salaries. 7.Heat, water, and power consumed in the factory. 8.Materials used for boxing products for shipment overseas. (Units are not normally boxed.) 9. Advertising costs. 10. Workers' compensation insurance for factory employees. 11. Depreciation on chairs and tables in the factory lunchroom. 12. The wages of the receptionist in the administrative offices. 13. Cost of leasing the corporate jet used by the company's executives. 14. The cost of renting rooms at a Florida resort for the annual sales conference. 15. The cost of packaging the company's product. Classify each cost as being either variable or fixed with respect to the number of units produced and sold. Also classify each cost as either a period or a product cost. Predicting Cost Preparing Financia Cost Item Behavior Statements 1. Hamburger buns in a Wendy's restaurant. 2. Advertsing by a dental office. 3. Apples processed and canned by Del Monte. 4. Shipping canned apples from a Del Monte plant to customers. 5. Insurance on a Bausch & Lomb factory producing contact lenses. 6. Insurance on IBM's corporate headquarters. 7. Salary of a supervisor overseeing production of printers at Hewlett 8. Commissions paid to automobile salespersons 9.Depreciation of factory lunchroom facilities at a General Electric plant. 10. Steering wheels installed in BMWs Packard