Answer:
Montgomery Department Stores, Inc.
A. Direct costs of the Apparel Department:
Cost of sales—Evendale Store $ 101,500
Sales commission—Evendale Store $ 8,450
Manager’s salary—Evendale Store $ 8,550
Total direct costs $118,500
B. Direct costs of the Evendale Store:
Apparel Department cost of sales—Evendale Store $ 101,500
Store manager’s salary—Evendale Store $ 15,000
Apparel Department sales commission—Evendale Store $ 8,450
Store utilities—Evendale Store $ 14,900
Apparel Department manager’s salary—Evendale Store $ 8,550
Janitorial costs—Evendale Store $ 11,000
Total direct costs $159,400
C. Apparel Department's variable direct costs:
Cost of sales—Evendale Store $ 101,500
Sales commission—Evendale Store $ 8,450
Total variable direct costs $109,950
Explanation:
Corporate legal office salaries $ 64,800
Corporate headquarters building lease $ 75,600
Central warehouse lease cost $ 20,900
Apparel Department cost of sales—Evendale Store $ 101,500
Store manager’s salary—Evendale Store $ 15,000
Apparel Department sales commission—Evendale Store $ 8,450
Store utilities—Evendale Store $ 14,900
Apparel Department manager’s salary—Evendale Store $ 8,550
Janitorial costs—Evendale Store $ 11,000
