Answer
If the cost object is Mixing Department, then anything directly associated with the Mixing Department will be a direct cost. This will include:
• Depreciation on mixing machines
• Mixing Department manager
• Materials handlers (of the Mixing Department)
• Machinist (running the mixing machines)
• Machine Maintenance personnel (of the Mixing Department)
• Maintenance supplies (if separately identified for the Mixing Department)
Of course the yeast and flour will also be a direct cost of the Mixing Department, but it is already a direct cost of each kind of bread produced.
Work Step by Step
Anything associated with Mixing Department will be a direct cost.
