Variable and Fixed Costs; Subtleties of Direct and Indirect Costs [L06, L07] 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. Below are listed a number of costs of the center and the meals-on-wheels program. example The cost of groceries used in meal preparation.
a. The cost of leasing the meals-on-wheels van.
b. The cost of incidental supplies such as salt, pepper, napkins, and so on.
c. The cost of gasoline consumed by the meals-on-wheels van.
d. The rent on the facility that houses Madison Seniors Care Center, including the meals- on-wheels program.
e. The salary of the part-time manager of the meals-on-wheels program.
f. Depreciation on the kitchen equipment used in the meals-on-wheels program.
g. The hourly wages of the caregiver who drives the van and delivers the meals.
h. The costs of complying with health safety regulations in the kitchen.
i. The costs of mailing letters soliciting donations to the meals-on-wheels program.
Required:
For each cost listed above, 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. Use the below form for your answer.
Direct or Indirect Cost of the Meals- on-Wheels Program
Direct or Indirect Cost of Particular Seniors Served by the Meals-on- Wheels Program
Variable or Fixed;with Respect to. the Number of Seniors Served by the Meals-on- Wheels Program
Item Description Direct Indirect Direct Indirect Variable Fixed
Example The cost of groceries used in meal preparation X X X