Classifying Costs in a Service Company 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. For 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 g. Salaries of dispatching and communications personnel h. Headquarters information technology support staff salaries i. Safety training costs j. Wages of train engineers k. Wages of switch and classification yard personnel l. Costs of accident cleanup
Classifying Costs in a Service Company 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. For 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 g. Salaries of dispatching and communications personnel h. Headquarters information technology support staff salaries i. Safety training costs j. Wages of train engineers k. Wages of switch and classification yard personnel l. Costs of accident cleanup
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Classifying Costs in a Service Company
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. For 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. |
|
| f. Maintenance costs of right-of-way, bridges, and buildings | |
| g. Salaries of dispatching and communications personnel | |
| h. Headquarters information technology support staff salaries | |
| i. Safety training costs | |
| j. Wages of train engineers | |
| k. Wages of switch and classification yard personnel | |
| l. Costs of accident cleanup |
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