Direct cost: A cost indicates the payment of cash or the obligation to pay the cash in the future period for the generation of revenue or the service performed. A direct cost is the cost which is directly involved in the process of production. For example: The cost of plastic is the direct material for manufacturing a bottle. Indirect cost: An indirect cost is the cost which is indirectly involved in the process of production. For example: The salary of supervisor of a manufacturing business cannot be traced even though the supervisor contributes for the production. Cost object: A cost object is something to which costs are assigned, it is often a product lines or customers department for which costs are accumulated or measured by the management. To explain: The most logical definition for the final cost object.

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Answer 1

Question

Chapter 1, Problem 3PB

(a)

To determine

Direct cost:

A cost indicates the payment of cash or the obligation to pay the cash in the future period for the generation of revenue or the service performed. A direct cost is the cost which is directly involved in the process of production. For example: The cost of plastic is the direct material for manufacturing a bottle.

Indirect cost:

An indirect cost is the cost which is indirectly involved in the process of production. For example: The salary of supervisor of a manufacturing business cannot be traced even though the supervisor contributes for the production.

Cost object:

A cost object is something to which costs are assigned, it is often a product lines or customers department for which costs are accumulated or measured by the management.

To explain: The most logical definition for the final cost object.

(b)

To determine

To classify: Each cost as either direct cost or indirect cost.

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Answer 2

Question

Chapter 1, Problem 3PB

(a)

To determine

Direct cost:

A cost indicates the payment of cash or the obligation to pay the cash in the future period for the generation of revenue or the service performed. A direct cost is the cost which is directly involved in the process of production. For example: The cost of plastic is the direct material for manufacturing a bottle.

Indirect cost:

An indirect cost is the cost which is indirectly involved in the process of production. For example: The salary of supervisor of a manufacturing business cannot be traced even though the supervisor contributes for the production.

Cost object:

A cost object is something to which costs are assigned, it is often a product lines or customers department for which costs are accumulated or measured by the management.

To explain: The most logical definition for the final cost object.

(b)

To determine

To classify: Each cost as either direct cost or indirect cost.

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Answer 3

Question

Chapter 1, Problem 3PB

(a)

To determine

Direct cost:

A cost indicates the payment of cash or the obligation to pay the cash in the future period for the generation of revenue or the service performed. A direct cost is the cost which is directly involved in the process of production. For example: The cost of plastic is the direct material for manufacturing a bottle.

Indirect cost:

An indirect cost is the cost which is indirectly involved in the process of production. For example: The salary of supervisor of a manufacturing business cannot be traced even though the supervisor contributes for the production.

Cost object:

A cost object is something to which costs are assigned, it is often a product lines or customers department for which costs are accumulated or measured by the management.

To explain: The most logical definition for the final cost object.

(b)

To determine

To classify: Each cost as either direct cost or indirect cost.

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Answer 4

Question

Chapter 1, Problem 3PB

(a)

To determine

Direct cost:

A cost indicates the payment of cash or the obligation to pay the cash in the future period for the generation of revenue or the service performed. A direct cost is the cost which is directly involved in the process of production. For example: The cost of plastic is the direct material for manufacturing a bottle.

Indirect cost:

An indirect cost is the cost which is indirectly involved in the process of production. For example: The salary of supervisor of a manufacturing business cannot be traced even though the supervisor contributes for the production.

Cost object:

A cost object is something to which costs are assigned, it is often a product lines or customers department for which costs are accumulated or measured by the management.

To explain: The most logical definition for the final cost object.

(b)

To determine

To classify: Each cost as either direct cost or indirect cost.

Expert Solution & Answer

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Answer 5

Chapter 1, Problem 3PB

(a)

To determine

Direct cost:

A cost indicates the payment of cash or the obligation to pay the cash in the future period for the generation of revenue or the service performed. A direct cost is the cost which is directly involved in the process of production. For example: The cost of plastic is the direct material for manufacturing a bottle.

Indirect cost:

An indirect cost is the cost which is indirectly involved in the process of production. For example: The salary of supervisor of a manufacturing business cannot be traced even though the supervisor contributes for the production.

Cost object:

A cost object is something to which costs are assigned, it is often a product lines or customers department for which costs are accumulated or measured by the management.

To explain: The most logical definition for the final cost object.

(b)

To determine

To classify: Each cost as either direct cost or indirect cost.

Answer 6

Chapter 1, Problem 3PB

(a)

To determine

Direct cost:

A cost indicates the payment of cash or the obligation to pay the cash in the future period for the generation of revenue or the service performed. A direct cost is the cost which is directly involved in the process of production. For example: The cost of plastic is the direct material for manufacturing a bottle.

Indirect cost:

An indirect cost is the cost which is indirectly involved in the process of production. For example: The salary of supervisor of a manufacturing business cannot be traced even though the supervisor contributes for the production.

Cost object:

A cost object is something to which costs are assigned, it is often a product lines or customers department for which costs are accumulated or measured by the management.

To explain: The most logical definition for the final cost object.

Answer 7

Chapter 1, Problem 3PB

(a)

To determine

Direct cost:

A cost indicates the payment of cash or the obligation to pay the cash in the future period for the generation of revenue or the service performed. A direct cost is the cost which is directly involved in the process of production. For example: The cost of plastic is the direct material for manufacturing a bottle.

Indirect cost:

An indirect cost is the cost which is indirectly involved in the process of production. For example: The salary of supervisor of a manufacturing business cannot be traced even though the supervisor contributes for the production.

Cost object:

A cost object is something to which costs are assigned, it is often a product lines or customers department for which costs are accumulated or measured by the management.

To explain: The most logical definition for the final cost object.

Answer 8

(b)

To determine

To classify: Each cost as either direct cost or indirect cost.

Answer 9

(b)

To determine

To classify: Each cost as either direct cost or indirect cost.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 1 - Prob. 1DQ Ch. 1 - Prob. 2DQ Ch. 1 - What manufacturing cost term is used to describe...Ch. 1 - Distinguish between prime costs and conversion...Ch. 1 - What is the difference between a product cost and...Ch. 1 - Name the three inventory accounts for a...Ch. 1 - In what order should the three inventories of a...Ch. 1 - What are the three categories of manufacturing...Ch. 1 - Prob. 9DQ Ch. 1 - How does the Cost of goods sold section of the...

Solution Summary: The author explains the difference between direct and indirect costs. The hotel guest is the most logical definition for the final cost object.

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To classify: Each cost as either direct cost or indirect cost.

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