The following is a list of costs that were incurred in the production and sale of large commercial airplanes: A. Hourly wages of employees that assemble the airplane.

B. Salary of the Marketing Department personnel

C. Cost of paving the headquarters employee parking lot.

D. Cost of electrical wiring throughout the airplane

E. Cost of electronic guidance system installed in the airplane cockpit.

F. Salary of plant manager

G. Cost of miniature replicas of the airplane used to promote and market the airplane.

H. Salary of chief compliance officer of company

I. Power used by painting equipment.

J. Instrument panel installed in the airplane cockpit.

K. Annual bonus paid to the chief operating officer of the company.

L. Turbo-charged airplane engine

M. Interior trim material used throughout the airplane cabin.

N. Cost of normal scrap from production of airplane body

O. Human Resources Department costs for the year

P. Metal used for producing the airplane body.

Q. Annual fee to a celebrity to promote the aircraft.

R. Hydraulic pumps used in the airplane's flight control system.

S. Yearly cost of the maintenance contract for robotic equipment

T. Prebuilt leather seats installed in the first-class cabin.

U. Depreciation on factory equipment

V. Special advertising campaign in Aviation World magazine

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.

Z. Salary of chief financial officer 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. Inventories 1-Jan 31-Dec Materials 42,038 30,115 Work in process 60,705 76,000 Finished goods 96,140 94,810 Advertising expense 380,000 Depreciation exp. OE 28,500 Depreciation exp. FE 76,000 Direct labor 1,045,000 Heat, light, power- factory 50,635 Indirect labor 109,250 Materials purchased 528,770 Office salaries expense 302,100 Property taxes - factory 38,000 Property taxes - office Bldg. 23,750 Rent expense factory 25,650 Sales 3,657,500 Sales salaries exp. 190,000 Supplies factory- exp 9,025 Miscellaneous costs- factory 10,830 INSTRUCTIONS: 1. Prepare the 20Y8 Statement of Cost of Goods manufacture 2. Prepare the 20Y8 Income Statement