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ryzh [129]
2 years ago
6

Problem 1-20 Variable and Fixed Costs; Subtleties of Direct and Indirect Costs [LO1-1, LO1-4] Madison Seniors Care Center is a n

onprofit 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.
Business
1 answer:
Alenkasestr [34]2 years ago
5 0

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
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Explanation:

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If the selected boards are 1 and 2, then it is represented in pair as (1, 2).

If the selected boards are 1 and 3, then it is represented in pair as (1, 3).

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x                  0               1                    2

p(x)            0.3           0.6                0.1

​

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