Corporate headquarters building lease
$
77,000
Cosmetics Department sales commissions—Northridge Store
$
4,000
Corporate legal office salaries
$
59,000
Store manager's salary—Northridge Store
$
11,000
Heating—Northridge Store
$
10,000
Cosmetics Department cost of sales—Northridge Store
$
37,000
Central warehouse lease cost
$
16,000
Store security—Northridge Store
$
12,000
Cosmetics Department manager's salary—Northridge Store
$
4,000
The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores.
What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store?
A) $152,000
B) $33,000
C) $45,000
D) $77,000
Answer: A
Explanation: Costs that are not direct costs of the Northridge Store = Corporate headquarters building lease + Corporate legal office salaries + Central warehouse lease cost = $77,000 + $59,000 + $16,000 = $152,000
Difficulty: 2 Medium
Topic: Cost Classifications for Assigning Costs to Cost Objects
Learning Objective: 01-01 Understand cost classifications used for assigning costs to cost objects: direct costs and indirect costs.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
154) The following cost data pertain to the operations of Ladwig Department Stores, Inc., for the month of December.
Corporate legal office salaries
$
68,000
Shoe Department cost of sales—Brentwood Store
$
66,000
Corporate headquarters building lease
$
86,000
Store manager's salary—Brentwood Store
$
10,000
Shoe Department sales commissions—Brentwood Store
$
5,000
Store utilities—Brentwood Store
$
11,000
Shoe Department manager's salary—Brentwood Store
$
3,000
Central warehouse lease cost
$
3,000
Janitorial costs—Brentwood Store
$
11,000
The Brentwood Store is just one of many stores owned and operated by the company. The Shoe Department is one of many departments at the Brentwood Store. The central warehouse serves all of the company's stores.
What is the total amount of the costs listed above that are direct costs of the Shoe Department?
A) $66,000
B) $74,000
C) $106,000
D) $71,000
Answer: B
Explanation: Direct costs of the Shoe Department = Shoe Department cost of sales + Shoe Department sales commissions + Shoe Department manager's salary = $66,000 + $5,000 + $3,000 = $74,000
Difficulty: 1 Easy
Topic: Cost Classifications for Assigning Costs to Cost Objects
Learning Objective: 01-01 Understand cost classifications used for assigning costs to cost objects: direct costs and indirect costs.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
155) The following cost data pertain to the operations of Ladwig Department Stores, Inc., for the month of December.
Corporate legal office salaries
$
68,000
Shoe Department cost of sales—Brentwood Store
$
66,000
Corporate headquarters building lease
$
86,000
Store manager's salary—Brentwood Store
$
10,000
Shoe Department sales commissions—Brentwood Store
$
5,000
Store utilities—Brentwood Store
$
11,000
Shoe Department manager's salary—Brentwood Store
$
3,000
Central warehouse lease cost
$
3,000
Janitorial costs—Brentwood Store
$
11,000
The Brentwood Store is just one of many stores owned and operated by the company. The Shoe Department is one of many departments at the Brentwood Store. The central warehouse serves all of the company's stores.
What is the total amount of the costs listed above that are NOT direct costs of the Brentwood Store?
A) $74,000
B) $32,000
C) $157,000
D) $86,000
Answer: C
Explanation: Costs that are not direct costs of the Brentwood Store = Corporate legal office salaries + Corporate headquarters building lease + Central warehouse lease cost = $68,000 + $86,000 + $3,000 = $157,000