The following cost data pertain to the operations of Ladwig Department Stores, Incorporated, for the month of December. 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

Question

The following cost data pertain to the operations of Ladwig Department Stores, Incorporated, for the month of December.  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

Quizplus · Accepted Answer

The direct costs of the Shoe Department are the following:
- Salaries and wages of Shoe Department employees: $25,000
- Cost of shoes sold: $44,000
- Cost of Shoe Department supplies: $5,000
- Cost of Shoe Department utilities: $0
Total direct costs of Shoe Department: $74,000. The other costs listed (rent, depreciation, legal fees, etc.) are indirect costs that are not specifically tied to the Shoe Department.

The Following Cost Data Pertain to the Operations of Ladwig