The following is a list of costs that were incurred in the production and sale of...

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.

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

Solutions

Expert Solution

p. Metal used for producing the airplane body - Product costs - Direct material costs

q. Annual fee to a celebrity to promote the aircraft - Period costs - selling expenses

r. Hydraulic pumps used in the airplane's flight control system - Product costs - direct material costs

s. Yearly cost of the maintenance contract for robotic equipment - Product costs - factory overhead cost

t. Prebuilt leather seats installed in the first - class cabin - Product costs - direct material cost

u. Depreciation on factory equipment - Product costs - factory overhead cost

v. Special advertising campaign in Aviation World Magazine - Period costs - selling expense

w. Oil to lubricate factory equipment - Product costs - factory overhead cost

x. Masks for use by painters in painting the airplane body - Product costs - factory overhead cost

y. Decals for cockpit door, the cost of which is immaterial to the cost of the final product - Product costs - factory overhead cost

z. Salary of chief financial officer - Period cost - Administrative expense

ekkarill92 answered 1 year ago

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