Steinway Musical Instruments, Inc. is a leading manufacturer of pianos and band

Question

Steinway Musical Instruments, Inc. is a leading manufacturer of pianos and band and orchestral instruments. The company also maintains ten retail showrooms throughout the world. Classify each of the following costs as a product or period cost. Sitka spruce wood used in piano soundboards Glue used to secure xylophone mallet heads to the sticks Design costs for the company's sales catalog Salaries of the district sales managers The CEO's salary Salaries of the production workers who make Vito clarinets Freight charges for the delivery of a piano to a retail showroom Freight charges for delivery of metal used in trumpets Legal fees incurred to register the company with state sales tax agencies Lease payments for a drum manufacturing facility in Monroe, North Carolina Lease payments for a piano showroom in Coral Gables, Florida Sandpaper used to smooth the wooden components of a piano

Explanation / Answer

Product Costs Period Costs Product costs are those costs necessary in making products and are part of manufacturing process. Period costs are not necessary part of manufacturing process. They ae expensed when revenue from sale of products is realised They are expensed in the period in which they are incurred. Product costs are Raw Material , Labour and Factory overhead such Factory Depreciation, fuel Etc Period Costs are Advertising, Sales Commissions, Office Supplies Statement showing computations Particulars Amount a) Product Costs b) Product Costs c) Period Costs d) Period Costs e) Period Costs f) Product Costs g) Period Costs h) Product Costs i) Period Costs j) Period Costs k) Period Costs l) Product Costs

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