15. ---### Classifying Costs in a Service Company#### OverviewThis 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 ClassificationBelow 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.

Introduction: Direct costs: Costs which are directly related to the manufacturing of the product…

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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