value 200 points The following cost data pertaln to the oper

value: 2.00 points The following cost data pertaln to the operations of Rademaker Department Stores, Inc., for the month of March. Corporate headquarters building lease Cosmetics Department sales commisslons--Northridge Store Corporate legal office salaries Store manager\'s salary-Northridge Store Heating-Northrldge Store Cosmetics Department cost of sales-Northridge Store Central warehouse lease cost Store security-Northridge Store Cosmetics Department manager\'s salary--Northridge Store $78,000 $5,270 $66,500 $12,200 $39,100 $9,800 $4,310 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 direct costs of the Cosmetics Department? O $44,370 O $99,390 O$39,100 O $48,680

Solution

Solution: 1. Answer is 4th option \"$48,680\" Working Notes: Direct costs of the Cosmetics Department Cosmetics Department sales commissions $5,270 Cosmetics Department cost of sales $39,100 Cosmetics Department manager\'s salary $4,310 Total direct costs $48,680 Note: Direct costs are those costs that is completely related to a particular product or services rendered Store manager salary , store security & heating are indirect cost for the cosmetics department. 4. Answer is 3rd option \"$11,232.93\" Working Notes: Under Activity based costing Overhead cost is assigned based on activity rates multiple of activity used for the product total sum. a b c=a x b Activities Activity Rates Expected Activity Amount Setting up batches $80.75 71 $5,733.25 Processing customer orders $72.37 22 $1,592.14 Assembling products $7.91 494 $3,907.54 Total overhead costs assigned $11,232.93 6. Answer is 1st option \"$20,500\" Working Notes: given net income is for 6300 units & fixed expenses will not change for 6200 units Contribution margin per unit = total contribution margin / total no of units =126,000/6300 =$20 per unit Therefore Net operating income for 6200 units Contribution margin for 6200 units $124,000 a [ contribution margin per unit x no. of total units] [$20 x 6200 = $124,000 ] Less: Fixed expenses $103,500 b Net operating income for 6200 units $20,500 c=a-b 7. Answer is 4th option \" Increase of $2,800\" Working Notes: market cost increase is the fixed cost increase , and due to marketing cost sales will increase by 120 units. Current Proposed 6200 units 6200 +120 =     6320 units Total contribution margin [6200 x 80 ] 496,000 [6320 x 80 ] 505,600 Less: Fixed cost for 6200 unit there in no change 440,200 for 6320 increased by $6,800 447,000 [440,200 +6800 =447,000 ] Net operating income 55,800 58,600 due to marketing expenses , net operating income is increased by 2800 from $55,800 to 55,800+2800 =$58,600 Due to increase in monthly fixed cost , there is no change in selling price per unit & variable expenses per unit so contribution margin per unit remain same , calculation is taken from contribution margin. Please feel free to ask if anything about above solution in comment section of the question.