A Partial list of Berry Hotel’s costs is provided below.
a. cost of laundering towels and bedding.
b. Cost of food.
c. Cost to paint lobby.
d. Cost of advertising in local newspaper.
e. Cost to mail a customer survey.
f. Training for hotel restaurant servers.
g. Champagne for guests.
h. Wages of convention setup employees.
i. Pay per view movie rental costs (in rooms).
j. Cost of soaps and shampoos for rooms.
k. Wages of desk clerks.
l. Wages of kitchen employees.
m. Salary of the hotel president.
n. Depreciation of the hotel.
o. Wages of maids.
P. Cost to replace lobby furniture.
q. Cost of room mini-bar supplies.
r. Utility cost.
s. Wages of bellhops.
t. Cost of valet parking.
u. Guest room telephone costs for long-distance calls.
v. General maintenance supplies.
w. cost of new carpeting.
Instructions
1. What would be Berry’s most logical definition for the final cost object?
2. Identify whether each of the costs is to be classified as direct or indirect. For purposes of classifying each cost as direct or indirect. Use the hotel guest as the cost object.