Describe the purposes of classifying the cost


Response to the following problem:

A partial list of the costs for Wisconsin & 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.

a) Cost to lease railroad cars;

b) cost of track and bed replacement;

c) Diesel fuel costs;

d) Cost to lease train locomotives;

e) Depreciation of terminal facilities;

f) Maintenance costs of right of way, bridges & 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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Cost Accounting: Describe the purposes of classifying the cost
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