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

Classifying costs in a service company

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 as direct or indirect, use the train as the cost object.

a. Fuel costs

b. Maintenance costs of right of way, bridges, and buildings

c. Wages of switch and classification yard personnel

d. Cost to lease (rent) train locomotives

e. Wages of train engineers

f. Cost to lease (rent) railroad cars

g. Depreciation of terminal facilities

h. Payroll clerk salaries

i. Safety training costs

j. Cost of track and bed (ballast) replacement

k. Salaries of dispatching and communications
personnel

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