Exercise 4-1A Direct versus indirect costs Ludmilla 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 three projects. Cost items of the company follow: 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 Home Construction Division Pag 183 Cost of building permits Materials used in commercial construction projects Depreciation on home building equipment (small tools such as hammers or saws) Company president's salary Depreciation on crane used in commercial construction Depreciation on home office building Salary of corporate office manager otebock Required Identify each cost as being a direct or indirect cost assuming the cost objects are the individual products (houses or projects). Identify each cost as being a direct or indirect cost, assuming the cost objects are the two divisions. Identify each cost as being a direct or indirect cost assuming the cost object is Ludmilla Construction Company as a whole. a. b. e. Activate Windows 2 la. Items 3 Wages of workers assi Direct Cost Indirect Cost gned to a specific construction project Supplies used by the Commercial Const. Division 5Labor on a particular house Salary of the supervisor of Commercial construction projects Supplies, such as glue and nails, used by the Home const. division 8 Cost of building permits 9Materials used in Commercial construction projects 10 Depr. On Home building equipment (small tools such as hammers) 1Company president's salary 12 Depreciation on crane used in Commercial construction 3 Depreciation on home office buildin Salary of corporate office manager 15 6 b.lItems Direct Cost Indirect Cos Wages of workers assigned to a specific construction project 8 Supplies used by the Commercial Const. Division 19 Labor on a particular house 0Salary of the supervisor of Commercial construction projects 1Supplies, such as glue and nails, used by the Home const. division 2Cost of building permits aterials used in Commercial construction project Depr. On Home building equipment (small tools such as hammers) Company president's salary Depreciation on crane used in Commercial construction Depreciation on home office building Salary of corporate office manager 29 30 |c.|Items Direct Cost Indirect Cost Wages of workers assigned to a specific construction project 2 Supplies used by the Commercial Const. Division 3 Labor on a particular house Salary of the supervisor of Commercial construction projects 5 Supplies, such as glue and nails, used by the Home const. divisi on Cost of building permits 7 Mater 8 Depr. On Home equi 9 Conm 0 Depreciation on crane used in Commercial construction 1 Depreciation on home office buildin ials used in Commercial construction project e building equipment (small tools such as hammers) esident's sal Salary of corporate office manager
