Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 2 - An Introduction to Cost Terms and Purposes - Assignment Material - Exercises: 2-17(2)

Answer

If the cost object is Mixing Department, then anything directly associated with the Mixing Department will be a direct cost. This will include: • Depreciation on mixing machines • Mixing Department manager • Materials handlers (of the Mixing Department) • Machinist (running the mixing machines) • Machine Maintenance personnel (of the Mixing Department) • Maintenance supplies (if separately identified for the Mixing Department) Of course the yeast and flour will also be a direct cost of the Mixing Department, but it is already a direct cost of each kind of bread produced.

Work Step by Step

Anything associated with Mixing Department will be a direct cost.
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