Responsibility Income Statement-Cost Classification
Milton's, a Large Department Store, Prepares

question 74

Essay

Responsibility income statement-cost classification
Milton's, a large department store, prepares income statements by sales department. These statements follow the contribution margin approach, showing contribution margin and responsibility margin for each profit center as well as monthly income from operations for the store. Indicate the classification of each of the costs listed below by inserting the appropriate code letters in the space provided.
Costs
______ (a) The cost of merchandise sold in the Women's Sportswear Department.
______ (b) Advertising a sale in the Housewares Department (classify as a fixed cost).
______ (c) Depreciation on equipment used in the Automotive Service Department.
______ (d) Depreciation on the store's heating and air conditioning system.
_____ (e) Monthly salary of the manager of the Toy Department.
_____ (f) Sales taxes collected from customers and paid to local tax authorities.
_____ (g) Monthly salaries of store security guards.
$$\begin{array}{l}\text { Code Letters }\\\begin{array} { | l | l | l | l | } \hline \text { VC } & \text { = Variable costs } & \text { CF } & \text { = Common fixed costs } \\\hline \text { TF } & \text { = Traceable fixed costs } & \mathrm { X } & \text { = None of the above } \\\hline\end{array}\end{array}$$

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Definitions:

Cognitive Map

An internal representation of the spatial layout of an environment, allowing individuals to navigate and understand their surroundings.

Wire Monkey

Refers to Harry Harlow's experiments with rhesus monkeys, illustrating the importance of caregiving and companionship in social and cognitive development.

Operant

Pertaining to a form of learning where behavior is controlled by consequences, including rewards and punishments.

Classical

Pertaining to the first significant periods or highest class of an area of study, such as music, art, literature, or in the context of psychology, conditioning.