Question

The following cost data pertain to the operations of Montgomery Department Stores, Inc., for the month of July.

Answer 1

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