Question

The following cost data pertain to the operations of Swestka Department Stores, Inc., for the month of July. Corporate headquarters building lease $85,400 Cosmetics Department sales commissions--Northridge Store $5,000 Corporate legal office salaries $65,000 Store manager's salary-Northridge Store $19,600 Heating-Northridge Store $11,500 Cosmetics Department cost of sales--Northridge Store $32,700 Central warehouse lease cost $8,200 Store security-Northridge Store $17,600 Cosmetics Department manager's salary--Northridge Store $4,680 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. $158,600
b. $85,400
c. $42,380
d. $41,980

Answer 1

The answer is a. $158,600

Step-by-step explanation:

The types of costs which are not direct costs of the Northridge Store are costs that incurred for the common operations/activities of Swestka Department Stores, Inc., in July, instead of incurring for the Northridge Store alone.

So, these costs include the following items: Corporate headquarters building lease, Corporate legal office salaries and Central warehouse lease cost.

The total indirect costs of the Northridge Store will be calculated as: $85,400 + $65,000 + $8,200 = $158,600.

So, the answer is a.$158,600.