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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 | |
| d. Annual bonus paid to the chief operating officer of the company | |
| e. Turbo-charged airplane engine | |
| f. Interior trim material used throughout the airplane cabin | |
| g. Cost of normal scrap from production of airplane body | |
| h. Hourly wages of employees that assemble the airplane | |
| i. Salary of the marketing department personnel | |
| j. Cost of paving the headquarters employee parking lot | |
| k. Cost of electrical wiring throughout the airplane | |
| l. Cost of electronic guidance system installed in the airplane cockpit | |
| m. Salary of plant manager | |
| n. Cost of miniature replicas of the airplane used to promote and market the airplane | |
| 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 |
Classifying Cost
following is a list of costs incurred by several businesses.
Use the options above to classify A- Z . Classify each of the following costs as product costs or period costs. 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. Cost of fabric used by clothing manufacturer | |
| b. Maintenance and repair costs for factory equipment | |
| c. Rent for a warehouse used to store work in process and finished products | |
| d. Wages of production quality control personnel | |
| e. Oil lubricants for factory plant and equipment | |
| f. Depreciation of robot used to assemble a product | |
| g. Travel costs of marketing executives to annual sales meeting | |
| h. Depreciation of copying machines used by the Marketing Department | |
| i. Fees charged by collection agency on past-due customer accounts | |
| j. Electricity used to operate factory machinery | |
| k. Maintenance costs for factory equipment | |
| l. Pens, paper, and other supplies used by the Accounting Department in preparing various managerial reports | |
| m. Charitable contribution to United Fund | |
| n. Depreciation of microcomputers used in the factory to coordinate and monitor the production schedules | |
| o. Fees paid to lawn service for office grounds upkeep | |
| p. Cost of sewing machine needles used by a shirt manufacturer | |
| q. Cost of plastic for a telephone being manufactured | |
| r. Telephone charges by president’s office | |
| s. Cost of 30-second television commercial | |
| t. Surgeon’s fee for heart bypass surgery | |
| u. Depreciation of tools used in production | |
| v. Wages of a machine operator on the production line | |
| w. Salary of the vice president of manufacturing operations | |
| x. Factory janitorial supplies
Select link to prepare Statement of cost of goods and Income statement |
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