Asked by Neupane Saroj on Jun 13, 2024
Verified
An accounting course is taught in two classes per week for one hour and fifty minutes each. The classes are held in a building with 36 classrooms that are used for a variety of courses. The building has an advanced monitoring system which allows electricity costs to be determined for each classroom and for each course. If the cost object is the accounting course, which of the following is an indirect cost?
A) The electricity cost for the course.
B) The salary of the building's custodian.
C) The course Instructor's salary for teaching the course (he only teaches this one course) .
D) The cost of the preparation of the exam papers for this course.
Indirect Cost
Expenses that are not directly attributable to a specific product, service, or project, such as utilities or rent for office space.
Building's Custodian
A person responsible for the maintenance and upkeep of a building.
- Identify direct and indirect costs in specific scenarios.
Verified Answer
FT
Filiana TanotoJun 15, 2024
Final Answer :
B
Explanation :
The electricity cost for the classroom is a direct cost of the accounting course since it can be specifically identified to the course. The course instructor's salary is also a direct cost since he only teaches this one course. The cost of the exam papers is also a direct cost since it only pertains to the accounting course. However, the custodian's salary is an indirect cost since it cannot be specifically identified to the accounting course and is instead a shared cost among all courses in the building.
Learning Objectives
- Identify direct and indirect costs in specific scenarios.