Question

Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. For each cost incurrect at Northwest Hospital, indiciate whether it would most likely be a direct cost or an indirect cost of the specified cost object by listing the number and a "D" for direct or an "I" for indirect. For example: 1D, 2D, etc.
Cost / Cost Object

1 The wages of pediatric nurses / The pediatric department
2 Prescription drugs / A particular patient
3 Heating the hospital / The pediatric patient
4 The salary of the head of pediatrics / The pediatric patient
5 The salary of the head of pediatrics / The particular pediatric patient
6 Hospital chaplain's salary / A particular patient
7 Lab tests by outside contractor / A particular patient
8 Lab tests by outside contractor / A particular department

Answer 1

Answer:

Explanation:

The direct cost is the cost that is directly related to production. The example is direct material cost, direct labor cost, etc whereas the indirect cost is the cost that is not directly related to the production. It is also known as overhead cost only records all indirect cost i.e depreciation on equipment of factory, property taxes, etc

Based on this, the classification is as follows

1 The wages of pediatric nurses / The pediatric department  = Direct cost (D)

2 Prescription drugs / A particular patient  =  Direct cost (D)

3 Heating the hospital / The pediatric patient  = Indirect cost (D)

4 The salary of the head of pediatrics / The pediatric patient   =  Direct cost (D)

5 The salary of the head of pediatrics / The particular pediatric patient   = Indirect cost (D)

6 Hospital chaplain's salary / A particular patient    = Indirect cost (D)

7 Lab tests by outside contractor / A particular patient  =  Direct cost (D)

8 Lab tests by outside contractor / A particular department =  Direct cost (D)