ABC plc, a group operating retail stores, is compiling its budget statements for the next year. In this exercise revenues and costs at each store A, B and C are predicted. Additionally, all central costs of warehousing and a head office are allocated across the three stores in order to arrive at a total cost and net profit of each store operation. In earlier years the central costs were allocated in total based on the total sales value of each store. But as a result of dissatisfaction expressed by some store man- agers alternative methods are to be evaluated. The predicted results before any re-allocation of central costs are as follows: A В (£000) (£000) (000) 5000 3000 1900 1100 Sales Costs of sales Gross margin Local operating expenses Variable Fixed Operating profit 4000 2300 1700 2800 2200 660 730 310 500 290 700 600 370 840 The central costs which are to be allocated are: (£000) Warehouse costs: Depreciation Storage Operating and despatch Delivery Head office: Salaries 100 80 120 300 200 Advertising Establishment Total 80 120 1000 The management accountant has carried out discussions with staff at all locations in order to identify more suitable 'cost drivers' of some of the central costs. So far the following has been revealed. A В Number of despatches Total delivery distances (thousand miles) Storage space occupied (%) 550 70 450 520 50 90 40 30 30 An analysis of senior management time revealed that 10% of their time was devoted to warehouse issues with the remainder shared equally between the three stores. 1. 2. It was agreed that the only basis on which to allocate the advertising costs was sales revenue. 3. Establishment costs were mainly occupancy costs of senior management. This analysis has been carried out against a background of developments in the com- pany, for example, automated warehousing and greater integration with suppliers.

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yea…