Question

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. 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.

The cost of groceries used in meal preparation
The cost of leasing the Meals-On-Wheels van
The cost of incidental supplies such as salt, pepper, napkins, and so on
The cost of gasoline consumed by the Meals-On-Wheels van
The rent on the facility that houses Madison Seniors Care Center, including the Meals-On-Wheels program
The salary of the part-time manager of the Meals-On-Wheels program
Depreciation on the kitchen equipment used in the Meals-On-Wheels program
The hourly wages of the caregiver who drives the van and delivers the meals
The costs of complying with health safety regulations in the kitchen
The costs of mailing letters soliciting donations to the Meals-On-Wheels program

Answer 1

1. Direct cost of the Meals-On-Wheels program and particular seniors served by the program. It is variable cost.

2. Direct cost Meals-On-Wheels program and Indirect cost for particular seniors served by the program. It is Fixed cost.

3. Direct cost of Meals-On-Wheels and particular seniors served by the program. It is Variable cost.

4. Direct cost of the Meals-On-Wheels program and Indirect for particular seniors served by the program. Its a Variable cost.

5. Indirect cost of Meals-On-Wheels and Direct for particular seniors served by the program. It is a Fixed cost.

6. Indirect cost of the Meals-On-Wheels program and particular seniors served by the program. Its a Fixed cost.

7. Indirect cost of the Meals-On-Wheels program and particular seniors served by the program. Its a Fixed cost.

8. Direct cost of Meal-On-Wheels and particular seniors served by the program. It is Variable cost.

9. Direct cost of the Meals-On-Wheels program and Indirect for particular seniors served by the program. Its a Fixed cost.

10. Direct cost of the Meals-On-Wheels program and Indirect for particular seniors served by the program. Its a Variable cost.

Step-by-step explanation:

The direct cost related to Meals-On-Wheels is the cost that is directly associated with this program. If the cost changes due to number of unit’s production than it is considered as Variable cost. If the Cost is not affected by the unit’s production then it is called as fixed cost.

The Indirect cost is one which is not associated directly with the project but are incurred as the overheads. Indirect costs are sometimes difficult to assign to a particular project. It is also Variable or Fixed.

Here also the cost that is directly related and is changing due to number of units then it is Direct Variable cost. If it is not affected by number of units then it is fixed cost.