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Cost classifications for a service company A partial list of The Grand Hotel’s costs follows: a. Cost to mail a customer survey b. Wages of convention setup employees c. Pay-per-view movie rental costs (in rooms) d. Cost of food e. Cost of room mini-bar supplies f. Training for hotel restaurant servers g. Cost to paint lobby h. Cost of laundering towels and bedding i. Champagne for guests j. Salary of the hotel manager k. Depreciation of the hotel l. Cost of valet parking m. Wages of bellhops n. Cost to replace lobby furniture o. Cost of advertising in local newspaper p. Wages of desk clerks q. Wages of maids r. Cost of new carpeting s. Guest room telephone costs for long-distance calls t. Cost of soaps and shampoos for rooms u. Utility cost v. Wages of kitchen employees w. General maintenance supplies Instructions 1. What would be The Grand Hotel’s most logical definition for the final cost object? Explain. 2. Identify whether each of the costs is to be classified as direct or indirect. For purposes of classifying each cost as direct or indirect, use the hotel guest as the cost object.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 18, Problem 18.3BPR
Textbook Problem

Cost classifications for a service company

A partial list of The Grand Hotel’s costs follows:

a. Cost to mail a customer survey

b. Wages of convention setup employees

c. Pay-per-view movie rental costs (in rooms)

d. Cost of food

e. Cost of room mini-bar supplies

f. Training for hotel restaurant servers

g. Cost to paint lobby

h. Cost of laundering towels and bedding

i. Champagne for guests

j. Salary of the hotel manager

k. Depreciation of the hotel

l. Cost of valet parking

m. Wages of bellhops

n. Cost to replace lobby furniture

o. Cost of advertising in local newspaper

p. Wages of desk clerks

q. Wages of maids

r. Cost of new carpeting

s. Guest room telephone costs for long-distance calls

t. Cost of soaps and shampoos for rooms

u. Utility cost

v. Wages of kitchen employees

w. General maintenance supplies

Instructions

1. What would be The Grand Hotel’s most logical definition for the final cost object? Explain.

2. Identify whether each of the costs is to be classified as direct or indirect. For purposes of classifying each cost as direct or indirect, use the hotel guest as the cost object.

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Chapter 18 Solutions

Accounting
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