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W1 Assignment 1

1. PR.01-01A
2. PR.01-02A
3. PR.01-05B.ALGO

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   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
   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

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Costs	Classification	Classification
a. Salary of chief compliance officer of company	Period Cost	Administrative Expense
b. Power used by painting equipment	Product Cost	Factory Overhead Cost
c. Instrument panel installed in the airplane cockpit	Product Cost	Direct Materials Cost
d. Annual bonus paid to the chief operating officer of the company	Period Cost	Administrative Expense
e. Turbo-charged airplane engine	Product Cost	Direct Materials Cost
f. Interior trim material used throughout the airplane cabin	Product Cost	Direct Materials Cost
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 personnel	Period Cost	Selling Expense
j. Cost of paving the headquarters employee parking lot	Period Cost	Administrative Expense
k. Cost of electrical wiring throughout the airplane	Product Cost	Direct Materials Cost
l. Cost of electronic guidance system installed in the airplane cockpit	Product Cost	Direct Materials Cost
m. Salary of plant manager	Product Cost	Factory Overhead Cost
n. Cost of miniature replicas of the airplane used to promote and market the airplane	Period Cost	Selling Expense
o. Human resources department costs for the year	Period Cost	Administrative Expense
p. Metal used for producing the airplane body	Product Cost	Direct Materials Cost
q. Annual fee to a celebrity to promote the aircraft	Period Cost	Selling Expense
r. Hydraulic pumps used in the airplane’s flight control system	Product Cost	Direct Materials Cost
s. Yearly cost of the maintenance contract for robotic equipment	Product Cost	Factory Overhead Cost
t. Prebuilt leather seats installed in the first-class cabin	Product Cost	Direct Materials Cost
u. Depreciation on factory equipment	Product Cost	Factory Overhead Cost
v. Special advertising campaign in Aviation World magazine	Period Cost	Selling Expense
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
b. Power used by painting equipment	Period Cost	Administrative Expense