Accounting Problems. to the Operations of Mancia Department Stores

| | The following cost data pertain to the operations of Mancia Department Stores, Inc., for the month of February.

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. |

(1) | 1. | What is the total amount of the costs listed above that are NOT direct costs of the Brentwood Store? | $152,000 | | $92,000 | | $79,000 | | $38,000 |

Costs that are not direct costs of the Brentwood Store = Corporate legal office salaries + Corporate headquarters building lease + Central warehouse lease cost
= $62,000 + $79,000 + $11,000
= $152,000 |

| | A partial listing of costs incurred during December at Gagnier Corporation appears below:

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(1) | 2. | The total of the period costs listed above for December is: | $89,000 | | $310,000 | | $325,000 | | $399,000 |

Period costs = Administrative wages and salaries + Sales staff salaries + Corporate headquarters building rent + Marketing
= $105,000 + $68,000 + $34,000 + $103,000
= $310,000 |

(1) | 3. | The following costs were incurred in September:

Prime costs during the month totaled: | $79,000 | | $120,000 | | $62,000 | | $40,000 |

Prime cost = Direct materials + Direct labor
= $39,000 + $23,000 = $62,000 |

(1) | 4. | The following costs were incurred in September:

Conversion costs during the month totaled: | $50,000 | | $59,000 | | $137,000 | | $67,000 |

Conversion cost = Direct labor + Manufacturing overhead
= $29,000 + $21,000
= $50,000 |

(1) | 5. | Which of the following statements regarding fixed costs is incorrect? | Expressing fixed costs on a per unit basis usually is the best approach for decision making. | | Fixed costs expressed on a per unit basis will decrease with increases in activity. | | Total fixed