Question

The following cost data pertain to the operations of Quinonez Department Stores, Inc., for the month of September.

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
he 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. $152,000
B. $33,000
C. $45,000
D. $77,000

Answer 1

Answer:

Not direct or indirect costs are the overhead expenses and are not incurred for the purpose of production: these include administrative and legal cost, rents, telephonic expense, security expenses etc.

Direct costs are those that are incurred for the very purpose of production activity such as raw material or wages etc.

Explanation:

The table attached below elaborates this effectively.