Question

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 direct costs of the Cosmetics Department?

Answer 1

Answer: $45,000

Step-by-step explanation:

Direct costs are those that can be traced and attributed to the product being sold or manufactured by the company. They usually include direct labor and direct materials.

As this is a Cosmetics department, the direct labor will be the Department's manager's salary and the Sales commissions.

The Cost of sales will also be a direct cost as they were incurred to sell the product.

Direct Costs = Cosmetics Department manager's salary + Cosmetics Department sales commissions + Cosmetics Department cost of sales

= 4,000 + 4,000 + 37,000

= $45,000