Classify costs as direct or indirect (Learning Objective 3)

Classify the following as direct or indirect costs with respect to a local Blockbuster store (the store is the cost object). In addition, state whether Blockbuster would trace or allocate these costs to the store.

a. Store utilities

b. The CEO’s salary

c. The cost of the DVDs

d. The cost of national advertising

e. The wages of store employees

f. The cost of operating the corporate payroll department g. The cost of Xbox, PlayStation, and Nintendo games h. The cost of popcorn and candy sold at the store