Identifying Direct and Indirect Costs [LO6]

The Empire Hotel is a four-star hotel located in downtown Seattle.

Required:

For each of the following costs incurred at the Empire Hotel, indicate whether it would most likely be a direct cost or an indirect cost of the specified cost object by placing an X in the appropriate column.

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Cost Ex. Room service beverages 1. The salary of the head chef 2. The salary of the head chef 3. Room cleaning supplies 4. Flowers for the reception desk 5. The wages of the doorman 6. Room cleaning supplies Cost Object A particular hotel guest The hotel's restaurant A particular restaurant customer A particular hotel guest A particular hotel guest A particular hotel guest The house cleaning department 7. Fire insurance on the hotel building The hotel's gym 8. Towels used in the gym The hotel's gym Direct Indirect Cost Cost X