Allocating unassigned costs to retail store departments. The Demski Specialty Shop has two departments. Clothing and Accessories. The operating expenses for the year ending December 31 follow.

a. Prepare a three-column statement of operating expenses with column headings:

Clothing, Accessories. Total. Begin with direct departmental expenses and show a subtotal. Then continue with the allocated expenses, assigning each item to the various departments. Round all values to the nearest dollar and all percentages to one decimal place.

b. Prepare a condensed income statement with columns for Clothing, Accessories, and Total. Show the total operating expenses calculated in part a as a single deduction from gross margin.

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DEMSKI SPECIALTY SHOP: Operating Expenses Clothing Accessories Unassigned Total Salaries: Clerks $78,240 $69,360 $147,600 Others $48.000 48,000 Supplies Used 3,800 3,200 1,400 8,400 Depreciation of Equipment 1,600 4.800 - 6,400 Advertising. 3,726 8.586 3,888 16.200 Building Rent 19,000 19.000 Payroll Taxes 12,300 12,300 Workers' Compensation Insurance 2,080 2,080 Fire Insurance 1,000 1,000 Delivery Expense 1,800 1,800 Miscellaneous Expenses 1,000 800 600 2,400