Janice's Kennel and Pet Spa is located in Sydney. The company employs three pet attendants, four pet groomers and two front office staff who book appointments and keep records. The spa provides a range of services for dogs and cats including boarding, grooming, and obedience training. The grooming area includes a small retail section that carries dog and cat food, pet supplies, and toys. If the cost object is cost per day of boarding, which of the following is a direct cost?
A) Pet food
B) Front office staff salaries
C) Grooming supplies
D) Depreciation on shelving and equipment used in the grooming and retail area

Question

Quizplus · Accepted Answer

Pet food is a direct cost as it is directly related to the cost object of boarding. The cost of pet food is incurred only when a pet is boarded, making it a variable cost. The other options are indirect costs as they are not directly related to the cost object of boarding.

Janice's Kennel and Pet Spa Is Located in Sydney