A partial list of the costs for Wisconsin and Minnesota Railroad, a short hauler of freight, is provided below

From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences:

a. The wages of an assembly worker are normally considered a (period, product) cost.

b. Short-term plans are called (strategic, operational) plans.

c. The phase of the management process that uses process information to eliminate the source of problems in a process so that the process delivers the correct product in the correct quantities is called (directing, improving).

d. Direct materials costs combined with direct labor costs are called (prime, conversion) costs.

e. Materials for use in production are called (supplies, materials inventory).

f. The plant manager’s salary would be considered (direct, indirect) to the product.

g. An example of factory overhead is (sales office depreciation, plant depreciation).


Answer:
a. product
b. operational
c. improving
d. prime
e. materials inventory
f. indirect
g. plant depreciation






A partial list of the costs for Wisconsin and Minnesota Railroad, a short hauler of freight, is provided below. Classify each cost as either indirect or direct.
For purposes of classifying each cost, use the train as the cost object.

a. Cost to lease (rent) train locomotives
b. Salaries of dispatching and communications personnel
c. Costs of accident cleanup
d. Wages of switch and classification yard personnel
e. Cost of track and bed (ballast) replacement
f. Wages of train engineers
g. Payroll clerk salaries
h. Safety training costs
i. Fuel costs
j. Maintenance costs of right of way, bridges, and buildings
k. Cost to lease (rent) railroad cars
l. Depreciation of terminal facilities


Answer:
a. direct
b. indirect
c. indirect
d. indirect
e. indirect
f. direct
g. indirect
h. indirect
i. direct
j. indirect
k. direct
l. indirect