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Manageral Accounting |(16th Edition) Chapter 1, Problem 1E (3 Bookmarks)

4. Cost: Salary to the head of podiatric Cost object: Pediatric departments Justification: Direct wages is categorized as the cost involved in the production of services rendered. Therefore, it is a direct cost. Comment Submit Step 6 of 9 5. Cost: Salary to the head of podiatric Cost object: Podiatric patient Justification: It an indirect expenses which is indirectly leaded to the operation of the hospital in the head of podiatric

What is the difference between 4 and 5? I dont quite understand why 5 is indirect since the cost object is the pediatric patient.

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Answer:

Here are two Medical terms:

  1. Pediatric- relates to children
  2. Podiatric- relates to foot

Here the justification provided for 4 should be of 5 and for 5 for 4.

4. Salary of the head of Podiatric is indirect expense for Pediatric Department (if it is the cost object)

5. Salary of the head of Podiatric is direct if Podiatrc patients are treated (if it is the cost object)

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