Identifying Direct and Indirect Costs
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.
Cost | Cost Object | Direct Cost | Indirect Cost |
Ex. Room service beverages | A particular hotel guest | × |
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1. The salary of the head chef | The hotel's restaurant |
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2. The salary of the head chef | A particular restaurant customer |
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3. Room cleaning supplies | A particular hotel guest |
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4. Flowers for the reception desk | A particular hotel gues t |
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5. The wages of the doorman | A particular hotel guest |
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6. Room cleaning supplies | The housecleaning department |
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7. Fire insurance on the hotel building | The hotel's gym |
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8. Towels used in the gym | The hotel's gym |
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