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

Corporate headquarters building lease $80,000 Cosmetics Department sales commissions-Northridge Store $7,000 Corporate legal office salaries $75,000 Store manager's salary-Northridge Store $11,000 Heating-Northridge Store $11,000 Cosmetics Department cost of sales-Northridge Store $83,000 Central warehouse lease cost $17,000 Store security-Northridge Store $11,000 Cosmetics Department manager's salary-Northridge Store $4,000

The 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.

1) What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?

2) Corcetti Company manufactures and sells prewashed denim jeans. Large rolls of denim cloth are purchased and are first washed in a giant washing machine. After the cloth is dried, it is cut up into jean pattern shapes and then sewn together. The completed jeans are sold to various retail chains.

Which of the following terms could be used to correctly describe the cost of the soap used to wash the denim cloth?

Direct Cost Product Cost A) Yes Yes B) Yes No C) No Yes D) No No

3) Ence Sales, Inc., a merchandising company, reported sales of 6,400 units in April at a selling price of $684 per unit. Cost of goods sold, which is a variable cost, was $455 per unit. Variable selling expenses were $30 per unit and variable administrative expenses were $40 per unit. The total fixed selling expenses were $156,800 and the total administrative expenses were $260,400.

The gross margin for April was: