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Problem 1-18 Direct and Indirect Costs; Variable Costs [L01-1, LO1-4] The following cost data pertain to the operations of Montgomery Department Stores, Inc., for the month of July. Corporate legal office salaries Apparel Department cost of sales-Evendale Store Corporate headquarters building lease Store manager's salary-Evendale Store Apparel Department sales commission-Evendale Store Store utilities-Evendale Store Apparel Department manager's salary-Evendale Store Central warehouse lease cost Janitorial costs-Evendale Store $ 60,900 $ 117,300 $ 53,400 $ 12,400 $ 9,850 $ 18,800 $ 10,650 $ 16,000 $ 9,700 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? 1. Total direct costs for the Apparel Department 2. Total direct costs for the Evendale Store 3. Total direct costs for the Apparel Department that are also variable costs

Answer 1

4e boasyG Solution A Slsksys -2o Given data BeopaySeok APpasel DeRot ment cost of Sales- Evendale stose $1171 200 A PPael DePaotment sales Commission-Evendale 91850 stok APPA) DeProt ment manages's salarey $101650 Evendalestoe Total dicct casls foothe Aeparoel Depaot ment 137 800 So, Arparse) DEPart ment Cast of Sales-Evendale stooe +APPae De Parstment sales commission-EVendalC stooe +APPa sel DCactment mana ges's salarsy $117,300 95o + 10,650 S137 800 .Total disect casts foothe APPAe Defatment 137300 198-400 ocola obo Sace PbQ

2 APPadel DePastment cost sales- Evendale stooe 117 1200 12/400 stope mapagess salaroy-Evendale stooe APPaoc DeParot ment sales Commission Evendale stone 9.250 18,80D stoze uilties -Evendale stooe S a1700 Janitosial costs EVendale stode Appael DEPaslment manages Salaoy Evendale stode 3(06S0 $ 176700 Total die Cos foothe Evendale store APPaDcl Dcfaot ment cost saleg- Evendal Stopet stose manages's salay-Evendalesfoe+ Arroel ocfactmer A flaoe) pePaot ment sales commission-Bvendale stoestoe utilities -Evendale sb+Jani tozial cosls EUendalt stooe+ Al Pas pefarot ment manages's Salay Euendale Stoze ,300 S1214oot $9,850t 18,g0 970D $ 10,650 178700 TOtal dioect cast for the vendale stose l7870

(3 APPase peparotment cost of sale Evendale stooe 17300 APPaoel pepaotmend sales ommission- Evendale stooe Total variable cost- Alped depaotmen $127S0 APParocl DeRrotment cost of sale-Evendale spe+ APPael pePa men sales commission-Evendale stose 117,300 $9850 1271SO TOtal vapiable cost -APPese deprotment $1271s0