A partial list of the costs for Wisconsin and Minnesota Railroad, a short hauler of freight, follows. Classify each cost as either indirect or direct. purposes of classifying each cost, use the train as the cost object. Costs Classification a. Cost to lease (rent) railroad cars b. Cost of track and bed (ballast) replacement c. Diesel fuel costs d. Cost to lease (rent) train locomotives e. Depreciation of terminal facilities f. Maintenance costs of right-of-way, bridges, and buildings
A partial list of the costs for Wisconsin and Minnesota Railroad, a short hauler of freight, follows. Classify each cost as either indirect or direct. purposes of classifying each cost, use the train as the cost object. Costs Classification a. Cost to lease (rent) railroad cars b. Cost of track and bed (ballast) replacement c. Diesel fuel costs d. Cost to lease (rent) train locomotives e. Depreciation of terminal facilities f. Maintenance costs of right-of-way, bridges, and buildings
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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### Classifying Costs in a Service Company
#### Overview
This section provides a guide for classifying costs in the Wisconsin and Minnesota Railroad, a short hauler of freight. Each cost is identified as either **indirect** or **direct**. The classification is based on the train as the cost object.
#### Cost List and Classification
Below is a partial list of costs associated with the railroad operations. You need to classify each cost accordingly.
1. **Cost to lease (rent) railroad cars**
- Classification: [Direct/Indirect]
2. **Cost of track and bed (ballast) replacement**
- Classification: [Direct/Indirect]
3. **Diesel fuel costs**
- Classification: [Direct/Indirect]
4. **Cost to lease (rent) train locomotives**
- Classification: [Direct/Indirect]
5. **Depreciation of terminal facilities**
- Classification: [Direct/Indirect]
6. **Maintenance costs of right-of-way, bridges, and buildings**
- Classification: [Direct/Indirect]
7. **Salaries of dispatching and communications personnel**
- Classification: [Direct/Indirect]
8. **Headquarters information technology support staff salaries**
- Classification: [Direct/Indirect]
9. **Safety training costs**
- Classification: [Direct/Indirect]
10. **Wages of train engineers**
- Classification: [Direct/Indirect]
11. **Wages of switch and classification yard personnel**
- Classification: [Direct/Indirect]
12. **Costs of accident cleanup**
- Classification: [Direct/Indirect]
---
Each classification helps in understanding how costs are attributed to specific operations within the company, influencing financial planning and decision-making processes.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F55f0052a-9d0d-41a8-9339-203ce40e3605%2Fe50950e4-ab76-4c90-9379-cc8f6699dc22%2Futglrlf_processed.png&w=3840&q=75)
Transcribed Image Text:---
### Classifying Costs in a Service Company
#### Overview
This section provides a guide for classifying costs in the Wisconsin and Minnesota Railroad, a short hauler of freight. Each cost is identified as either **indirect** or **direct**. The classification is based on the train as the cost object.
#### Cost List and Classification
Below is a partial list of costs associated with the railroad operations. You need to classify each cost accordingly.
1. **Cost to lease (rent) railroad cars**
- Classification: [Direct/Indirect]
2. **Cost of track and bed (ballast) replacement**
- Classification: [Direct/Indirect]
3. **Diesel fuel costs**
- Classification: [Direct/Indirect]
4. **Cost to lease (rent) train locomotives**
- Classification: [Direct/Indirect]
5. **Depreciation of terminal facilities**
- Classification: [Direct/Indirect]
6. **Maintenance costs of right-of-way, bridges, and buildings**
- Classification: [Direct/Indirect]
7. **Salaries of dispatching and communications personnel**
- Classification: [Direct/Indirect]
8. **Headquarters information technology support staff salaries**
- Classification: [Direct/Indirect]
9. **Safety training costs**
- Classification: [Direct/Indirect]
10. **Wages of train engineers**
- Classification: [Direct/Indirect]
11. **Wages of switch and classification yard personnel**
- Classification: [Direct/Indirect]
12. **Costs of accident cleanup**
- Classification: [Direct/Indirect]
---
Each classification helps in understanding how costs are attributed to specific operations within the company, influencing financial planning and decision-making processes.
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