The following is a list of costs that were incurred in the production and sale of large commercial airplanes:

Annual bonus paid to the chief financial officer of the company

Annual fee to a celebrity to promote the aircraft

Cost of electronic guidance system installed in the airplane cockpit

Cost of the flight data recorder (the black box) for the airplane

Cost of normal scrap from production of the airplane body

Cost of small replicas of the airplane used to promote and market the airplane

Cost of paving the headquarters employee parking lot

Decals for cockpit door, the cost of which is immaterial to the cost of the final product

Depreciation on factory equipment

Hourly wages for janitorial staff for the factory

Hydraulic pumps used in the airplanes flight control system

Instrument panel installed in the airplane cockpit

Interior trim material used throughout the airplane cabin

Masks for use by painters in painting the airplane body

Metal used for producing the airplane body

Oil to lubricate factory equipment

Power used by painting equipment

Prebuilt leather seats installed in the first-class cabin

Production Quality Control Department costs for the year

Salaries of Marketing Department personnel

Salaries of test pilots

Salary of chief financial officer

Salary of plant manager

Special advertising campaign in Aviation World magazine

Wages of employees that assemble the airplanes

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 headings for your answer, placing an X in the appropriate column:

Product CostsPeriod Costs CostDirect Materials CostDirect Labor CostFactory Overhead CostSelling ExpenseAdministrative Expense