ABC Retail operates a chain of clothing stores. Calculate the direct costs, fixed costs, variable costs, and total operating costs for one store location based on the following information:

• Cost of goods sold (direct): $100,000 per month
• Rent (fixed): $5,000 per month per store
• Sales commissions (variable): 5% of monthly sales revenue
• Utilities (fixed): $1,000 per month per store
• Marketing expenses (variable): $2,000 per month plus 1% of monthly sales revenue

Requirements:

• Present the direct, fixed, and variable costs for operating one store location.
• Calculate the total operating costs for one month.
• Discuss the impact of increasing sales revenue by 10% on total variable costs.
• Analyze the fixed costs' stability and impact on ABC Retail's profitability.
• Recommend strategies to reduce fixed costs while maintaining operational efficiency.