Question

Steinway musical instruments, inc. is a leading manufacturer of pianos and band and orchestra instruments. the company also maintains ten retailshowrooms throughout the world. classify each ofthe following costs as a product or period cost.

a. Sitka spruce wood used in piano soundboards

Answer 1

The Sitka spruce wood used in piano soundboards is classified as a product cost because it is a direct material cost in the production of pianos.

Step-by-step explanation:

The question from Steinway Musical Instruments, Inc. about the classification of costs as product or period cost can be answered as follows:

The Sitka spruce wood used in piano soundboards is a direct material, thus it is classified as a product cost. Product costs are the costs that are directly associated with the production of goods. In the case of Steinway Musical Instruments, the wood is a core component in producing pianos, tying the cost directly to the product itself. Therefore, product costs are part of the inventory value until the product is sold.