Question

Classify each of the following costs as a direct cost or an indirect​ cost, assuming that the cost object is the Juniors Department​ (clothing and accessories for teenage and young​ women) in the Stow​ Kohl's department store.​ (Kohl's is a chain of department stores and has stores located across the United​ States.)

Answer 1

Answer:

• deprecation of the building:  INDIRECT COSTS
• costs of costume jewelry on the mannequins in the juniors department : DIRECT COSTS
• cost of bags used to package customer purchases at the main registers for the store : INDIRECT COSTS
• the median kohl's store manager salary:  INDIRECT COSTS
• cost of the security staff at the medina store : INDIRECT COSTS
• manager of juniors department:  DIRECT COSTS
• junior department sales clerks : DIRECT COSTS
• cost of juniors clothing:  DIRECT COSTS
• cost of hangers used to display the clothing in the store : INDIRECT COSTS
• electricity used for the building : INDIRECT COSTS
• costs of radio advertising for the store:  INDIRECT COSTS
• juniors clothing buyers' salaries (these buyers buy for all the juniors departments of kohl's store):  INDIRECT COSTS

Explanation:

Indirect costs cannot be directly traced to a cost object, while direct costs can be directly traced. Usually direct costs tend to vary depending on total output, while indirect costs tend to be fixed.