Required: A number of costs of the center and the Meals-On-Wheels program are listed below. For each cost listed below, indicate whether it is a direct or indirect cost of the Meals-On-Wheels program, whether it is a direct or indirect cost of particular seniors served by the program, and whether it is variable or fixed with respect to the number of seniors served.
Required: A number of costs of the center and the Meals-On-Wheels program are listed below. For each cost listed below, indicate whether it is a direct or indirect cost of the Meals-On-Wheels program, whether it is a direct or indirect cost of particular seniors served by the program, and whether it is variable or fixed with respect to the number of seniors served.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
O.
Account
Transcribed Image Text:Madison Seniors Care Center is a nonprofit organization that provides a variety of health services to the
elderly. The center is organized into a number of departments, one of which is the Meals-On-Wheels
program that delivers hot meals to seniors in their homes on a daily basis.
Required:
A number of costs of the center and the Meals-On-Wheels program are listed below. For each cost listed
below, indicate whether it is a direct or indirect cost of the Meals-On-Wheels program, whether it is a direct
or indirect cost of particular seniors served by the program, and whether it is variable or fixed with respect to
the number of seniors served.
Item
Example
a.
b.
C.
d.
e.
f.
g.
h.
i.
Description
The cost of groceries used in meal preparation
The cost of leasing the Meals-On-Wheels van
The cost of incidental supplies such as salt, pepper, napkins, and so on
The cost of gasoline consumed by the Meals-On-Wheels van
The rent on the facility that houses Madison Seniors Care Center, including the Meals-On-Wheels
program
The salary of the part-time manager of the Meals-On-Wheels program
Depreciation on the kitchen equipment used in the Meals-On-Wheels program
The hourly wages of the caregiver who drives the van and delivers the meals
The costs of complying with health safety regulations in the kitchen
The costs of mailing letters soliciting donations to the Meals-On-Wheels program
Direct or Indirect
Cost of the Meals-
On-Wheels Program
Direct
Direct or Indirect
Cost of Particular
Seniors Served by
the Meals-On-
Wheels Program
Direct
Variable or Fixed
with Respect to the
Number of Seniors
Served by the Meals-
On-Wheels Program
Variable
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