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}

In Deciding Which Responsibility Centers Can Benefit Most from Short-Term

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