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At the end of year 1, actual corporate costs incurred were $24.5 million. Of the $24.5 million, $6.7 million was fixed, $9.4 million was variable

At the end of year 1, actual corporate costs incurred were $24.5 million. Of the $24.5 million, $6.7 million was fixed, $9.4 million was variable with respect to revenues, and $8.4 million was variable with respect to the number of stores. Actual division results in year 1, prior to any allocation, are as follows: East West Number of stores 27 43 Revenues ($000) $ 54,000 $ 112,000 Direct costs ($000) 35,000 66,500 Division margin ($000) $ 19,000 $ 45,500

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