Identify each cost as being a direct or indirect cost


Jeelani Construction Company is composed of two divisions: (1) Home Construction and (2) Commercial Construction. The Home Construction Division is in the process of building 12 houses and the Commercial Construction Division is working on 3 projects. Cost items of the company follow.

  • Company president's salary
  • Depreciation on crane used in commercial construction
  • Depreciation on home office building
  • Salary of corporate office manager
  • Wages of workers assigned to a specific construction project
  • Supplies used by the Commercial Construction Division
  • Labor on a particular house
  • Salary of the supervisor of commercial construction projects
  • Supplies, such as glue and nails, used by the House Construction Division
  • Cost of building permits
  • Materials used in commercial construction projects

Depreciation on home building equipment (small tools such as hammers or saws)
Required
A. Identify each cost as being a direct or indirect cost assuming the cost objects are individual products (houses or projects).
B. Identify each cost as being a direct or indirect cost, assuming the cost objects are the two divisions.
C. Identify each cost as being a direct or indirect cost, assuming the cost object is Jeelani Construction Company as a whole.

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Accounting Basics: Identify each cost as being a direct or indirect cost
Reference No:- TGS0706646

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