Suppose that you have been given a summer job as an intern at issac aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. the company, which is privately owned, has approached a bank for a loan to it finance its growth. the bank requires financial statements before approving such a loan. you have been asked to prepare the financial statements and were given the following list of costs:
- depreciation on salespersons cars.
rent on equipment used in the factory
- lubricants used for machine maintenance
- salaries of personnel who work in the finished goods warehouse
- soap and paper towels used by factory workers at the end of a shift.
- factory supervisors salaries
- heat, water, and power consumed in the factory
- materials used for boxing products for shipment overseas. (unites are not normally
- advertising cost
- workers compensation insurance for factory employees
- depreciation on chairs and tables in the factory lunchroom
- the wages of the receptionist in the administrative offices
- cost of leasing the corporate jet used by the company’s executives
- the cost of renting rooms at a florida resort for the annual sales conference
- the cost of packaging the company’s product.
required:
classify the above cost as either product cost or period costs for the purpose of preparing the financial statements for the bank.