Question

4. Following table shows information of costs items of a particular store of Starbucks, “Branch A.” Indicate whether the cost item is direct or indirect cost based on the cost objects.

Cost item	Cost object	Indirect cost	Direct cost
Salary of the Branch A's Manager	A particular customer at Branch A
Salary of the Starbucks’ CEO	Branch A
Depreciation of coffee maker machines of Branch A	Branch A
Leasing cost of Branch A's store	A particular customer at Branch A
Cost of a coffee cup lid	A particular customer at Branch A
Advertising of Starbucks in the national media	Branch A
Salary of a Barista of Branch A	Branch A
Cost of furniture of Branch A	A particular customer at Branch A
Cost of cleaning and maintenance of Branch A	A particular customer at Branch A
Tax expense of Branch A	Branch A

Answer 1

Cost item	Cost object	Direct/Indirect Cost
Salary of the Branch A's Manager	A particular customer at Branch A	Indirect Cost
Salary of the Starbucks’ CEO	Branch A	Direct Cost
Depreciation of coffee maker machines of Branch A	Branch A	Indirect Cost
Leasing cost of Branch A's store	A particular customer at Branch A	Indirect Cost
Cost of a coffee cup lid	A particular customer at Branch A	Direct Cost
Advertising of Starbucks in the national media	Branch A	Direct Cost
Salary of a Barista of Branch A	Branch A	Direct Cost
Cost of furniture of Branch A	A particular customer at Branch A	Indirect Cost
Cost of cleaning and maintenance of Branch A	A particular customer at Branch A	Indirect Cost
Tax expense of Branch A	Branch A	Direct Cost