Florida Growers Association produces both orange and grapefruit juice that it sells as wholesale products to various grocery suppliers. Each type of juice requires a three-step process. The first step is the preparation department, which cleans the fruit. The second step is the squeezing department, which combines some of the necessary sugars and added flavoring to create the juice. This step also includes quality control using both automated and manual processes. The final step is packaging, which is an entirely automated process.

Costs:
Wages of the operator of the packaging machine	Cost of the oranges and grapefruit
Cartons for the juice	Wages of the fruit cleaners in the first step
Cost of the cleansers used to clean the fruit in step one.	Wages of the machinist running the squeezing machine
Depreciation on packaging machines	Property taxes on the factory building
Wages of the factory cleaning crew	Night security for the factory
Depreciation of the factory building	Sugars and flavorings of the juices
Cost of pest control of the factory	Water and electricity costs of the factory
Hurricane insurance on factory building	Oil, grease, etc. for factory machines
Salary of the production supervisor	Cost of disinfectants to clean the factory

If the cost object were the “squeezing department” rather than a gallon of grapefruit juice, which of the preceding costs would now be considered direct rather than indirect?

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In the event that the expense object were the squeezing office as opposed to a gallon of grapefruit ... View the full answer