Problem 1-20 Variable and Fixed Costs; Subtleties of Direct and Indirect Costs [LO1-1, LO1-4] 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.

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15-01-2020
Business

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Problem 1-20 Variable and Fixed Costs; Subtleties of Direct and Indirect Costs [LO1-1, LO1-4] 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.

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jepessoa jepessoa · Answer 1 · 2020-01-16T20:21:29+01:00

Answer:

a. leasing the MOW van

direct cost to Meals-On-Wheels program
indirect cost to particular seniors served by the program
fixed cost with respect to the number of seniors served

b. incidental supplies such as salt, pepper, napkins, and so on

direct cost to Meals-On-Wheels program
direct cost to particular seniors served by the program
variable cost with respect to the number of seniors served

c. gasoline consumed by the MOW van

direct cost to Meals-On-Wheels program
indirect cost to particular seniors served by the program
variable cost with respect to the number of seniors served

d. rent on the facility that houses Care Center, including the MOW

indirect cost to Meals-On-Wheels program
indirect cost to particular seniors served by the program
fixed cost with respect to the number of seniors served

e. salary of the part-time manager of the MOW

direct cost to Meals-On-Wheels program
indirect cost to particular seniors served by the program
fixed cost with respect to the number of seniors served

f. depreciation on the kitchen equipment used in the MOW

direct cost to Meals-On-Wheels program
indirect cost to particular seniors served by the program
fixed cost with respect to the number of seniors served

g. hourly wages of the caregiver who drives the van and delivers the meals

direct cost to Meals-On-Wheels program
indirect cost to particular seniors served by the program
variable cost with respect to the number of seniors served

h. complying with H&S regulations in the kitchen

direct cost to Meals-On-Wheels program
indirect cost to particular seniors served by the program
fixed cost with respect to the number of seniors served

i. mailing letters soliciting donations to the MOW

direct cost to Meals-On-Wheels program
indirect cost to particular seniors served by the program
fixed cost with respect to the number of seniors served

chilljain33 chilljain33 · Answer 2 · 2022-01-18T14:35:36+01:00

The correct set of choices as to the direct costs, indirect costs, fixed costs and variable costs are as explained below. Please refer below for bifurcation of costs of an organization

Costs of an Organization

Fixed costs are such costs which stay in the organization for a longer period of time and are of capital nature, whereas variable costs are such costs which do not stay for a longer period and are of recurring nature.

Direct costs are such costs which are directly related to the nature of the business, and indirect costs are referred to as costs which are not a part of direct costs.

Variable cost for Meals On Wheels program will be the ones that are not headed as fixed costs under the image attached below. Please refer.

Hence, the different types of costs for the Meals On Wheels program are as attached in the images.

Learn more about costs of an organization here:

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