Question

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

Answer 1

A	Salary of Chief Compliance Officer of Company	Period Cost , Administrative Expenses
B	Power used by painting equipment	Product Cost, Factory Overhead Cost
C	Instrument Panel installed in the airplane cockpit	Product Cost , Direct Material Cost
D	Annual Bonus paid to the chief operating officer of the company	Period Cost, Administrative Expenses
E	Turbo-charged airplane engine	Product Cost , Direct Material
F	Interior trim material used throughout the airplane cabin	Product Cost , Direct Material
G	Cost of normal scrap from production of airplane body	Product Cost, Factory Overhead Cost
H	Hourly wages of employees that assemble the airplane	Product Cost,Direct Labor Cost
I	Salary of the marketing Department Personal	Period Cost,Selling Expense
J	Cost of Paving the Headquarters employee parking lot	Period Cost, Administrative Expenses
K	Cost of electrical wiring throughout the airplane	Product Cost, Direct Material
L	Cost of electronic guidance system installed in the airplane cockpit	Product Cost, Direct Material Cost
M	Salary of plant Manager	Product Costs, Factory Overheads Cost
N	Cost of miniature replicas of the airplane used to promote and market the airplane	Period Cost, Selling Expenses
O	Human Resource department cost of the year	Period Cost,Administrative Expenses
P	Metal used for producing the airplane body	Product Cost, Direct Material Cost
Q	Annual fee to a celebrity to promote the aircraft	Period Cost, Selling Expenses
R	Hydrulic pumps used in the airplane fight control system	Product Cost,Direct Material Cost
S	Yearly Cost of Maintance contract for robotic equipment	Product Cost , Factory Overhead Cost
T	Prebuilt leather seats installed in the first class cabin	Product Cost, Direct Material Cost
U	Depreciation on factory equipment	Product Cost, Factory Overhead Cost
W	Oil to lubricate factory equipment	Product Cost, Factory Overhead Cost
X	Masks for use by painters in painting the airplane body	Product Cost, Factory Overhead Cost
Y	Decals for cockpit door , the cost of which is immaterial to the cost of the final product	Product Cost , Factory Overhead Cost
z	Salary of Chief financial officer	Period Cost, Administrative Expenses