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Exercise 3 (Chapter 12)-Direct versus indirect costs Johnson Construction Company is in the process of building 12 houses and three commercial construction projects. Cost items
Exercise 3 (Chapter 12)-Direct versus indirect costs Johnson Construction Company is in the process of building 12 houses and three commercial construction projects. Cost items of the company follow: a. Wages of workers assigned to a specific construction project b. Supplies used by the commercial construction projects c. Labor on a particular house d. Salary of the supervisor of one of the commercial construction projects e. Supplies, such as glue and nails, used in the building of a house f. Cost of building permits g. Materials used in the commercial construction projects h. Depreciation on home building equipment (small tools such as hammers and saws) i. Salary of Johnson Company's president j. Depreciation on a crane used in commercial construction k. Depreciation on Johnson Company's office building I. Salary of Johnson Company's office manager Required: Identify each cost as being a direct (D) or an indirect (I) cost
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