The following cost data pertain to the operations of Montgomery
Department Stores, Inc., for the month of July.
The Evendale Store is just one of many stores owned and operated
by the company. The Apparel Department is one of many departments
at the Evendale Store. The central warehouse serves all of the
company’s stores.
Required:
1. What is the total amount of the costs listed above that are direct costs of the Apparel Department?
2. What is the total amount of the costs listed above that are direct costs of the Evendale Store?
3. What is the total amount of the Apparel Department’s direct costs that are also variable costs with respect to total departmental sales?
| Corporate legal office salaries | $ | 80,100 |
| Apparel Department cost of sales—Evendale Store | $ | 101,400 |
| Corporate headquarters building lease | $ | 77,400 |
| Store manager’s salary—Evendale Store | $ | 20,000 |
| Apparel Department sales commission—Evendale Store | $ | 11,450 |
| Store utilities—Evendale Store | $ | 14,200 |
| Apparel Department manager’s salary—Evendale Store | $ | 11,050 |
| Central warehouse lease cost | $ | 18,300 |
| Janitorial costs—Evendale Store | $ | 11,100 |
Required:
1. What is the total amount of the costs listed above that are direct costs of the Apparel Department?
2. What is the total amount of the costs listed above that are direct costs of the Evendale Store?
3. What is the total amount of the Apparel Department’s direct costs that are also variable costs with respect to total departmental sales?
