Reference no: EM132686157

Ashby clothing is a female clothing line selling high end winter apparel. The company has four brick and mortar locations in central Pa. All locations share the use of the professional back office staff personnel at the company's headquarters. In 2018 the cost of the marketing department was $133,500. The cost of the accounting department was $184,850. The cost of the information technology department was $61,155. Lastly, the customer service call center had a cost of $77,020. Below you will find information was provided about the operations about each store location.

Problem 1: Allocate the cost of the back office departments to each of the stores based on, (A) Total Revenue, (B) Gross Margin, and (C) Quantity of winter coats sold.

                         East Mall               West mall              South Mall             North mall
Sales Revenue       505000                 720000                  225000             630000
Cost of Goods Sold  115000                470000                100000              400000
Quantity of Coats Sold 1825               3000                     800                  2500