FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 24: Departmental Accounting

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

Advertising expense totaled $20,000.If indirect advertising costs are allocated based on gross sales per department,what amount would be allocated to the glassware department if $5,000 of advertising is indirect? Gross Sales: jewelry,$80,000; glassware,$30,000; watches,$40,000.

A) $1,000
B) $1,333
C) $2,500
D) $2,667

E) None of the above
F) C) and D)

Correct Answer

verified

Show Answer

Question 42

True/False

Review LaterAdd Note

Review Later

The availability of suppliers and a firm's potential capacity is a consideration before a department is added.

A) True
B) False

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

Direct expenses are those expenses that:

The photography department in a department store experienced the following revenue and expenses during October: $\begin{array} { | l | r | } \hline \text { Sales } & \$ 23,500 \\\hline \text { Cost of Goods Sold } & 8,200 \\\hline \text { Direct Operating Expenses } & 1,000 \\\hline \text { Indirect Operating Expenses } & 2,300 \\\hline\end{array}$ The photography department's contribution margin is:

Hawkeye Golf is considering dropping the clothing department because it is not generating a profit as disclosed by the following data: $\begin{array} { l l } \text { Sales } & \$ 1,800 \\\text { Cost of Goods Sold } & \underline { 800 } \\\text { Grom Profit on Sales } &\$ 1,000 \\\text { Direct Expenses } &700 \\\text { Indirect Expenses } & \underline{\$ 500}\\\text { Net Loss } &\underline{ \$ (200)} \\\end{array}$ Note: None of the indirect expenses can be avoided by dropping the department. Should Hawkeye drop the department? Show your computations.

Administrative expenses are:

To calculate gross profit,subtract cost of goods sold and operating expenses from net sales.

In departmental accounting,it is necessary to break down revenue,but not expenses by departments.

From the following partial data,prepare a departmental income statement showing income before tax along with net income for Mason Corporation for the month ended December 31. $\begin{array} { l r } \text { Net Sales-Sporting Goods } & \$ 3,000 \\\text { Net Sales-Shoes } & 1,500 \\\text { Cost of Goods Sold-Sporting Goods } & 1,950 \\\text { Cost of Goods Sold-Shoes } & 900 \\\text { Income Tax Rate is } 30 \% & \\\text { Sporting Goods Dept.-5,000 square feet } & \\\text { Shoe Dept.-3,000 square feet } &\end{array}$ The following items are indirect expenses and should be allocated: $\begin{array}{l}\quad\quad\quad\quad\quad\quad\quad\text { Basis of Appropriation }\\\begin{array} { l r l } \text { Building Expense } & \$ 240 & \text { Square Footage } \\\text { Delivery Expense } & \$ 135 & \text { Net Sales } \\\text { Depreciation Expense } & \$ 40 & \text { Square Footage }\end{array}\end{array}$

Below is a list of expenses (direct and indirect).You are to determine the total direct cost for departments A and B. Salary Expense $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\$ 8,444$ $\begin{array}{lcc}\text { Department }&[\mathrm{A}]&[\mathrm{B}]\\\text { Cost of Goods Sold } & \$ 100,000 & \$ 300,000 \\\text { Employees } & 2 & 6 \\\text { Value of Equipment in each area } & \$ 8,000 & \$ 12,000 \\\text { Square footage of use } & 200 \text { sq. ft. } & 400 \text { sq. ft. }\end{array}$ Direct cost for department A $ ________ B $ ________

A human resource department would be a profit center.

Indirect expenses are subjective in nature and may be allocated in a number of ways.

Compute net income for the housewares department,when gross profit is $550,000,direct expenses $235,000,indirect expenses are $110,000 and sales are $875,000.

Direct expenses are assigned to departments based on the actual expenses incurred.

A indirect expense should be traceable to a respective department.

If the cosmetic department in the store measures 10,000 square feet and the total building cost is $30,000 for a 40,000 square foot building,the cost that would be allocated to the cosmetic department would be:

Which of the following would be a direct expense?

A profit center and a cost center both generate revenue.

The PPC department of Ajax shows gross sales of $730,600 for computer supplies and $934,900 for office supplies.The cost of the computer supplies was $534,000 and the cost of the office supplies was $491,400.What is the gross profit for each category of the department respectively?

The photography department in a department store experienced the following revenue and expenses during October: $\begin{array} { | l | r | } \hline \text { Sales } & \$ 23,500 \\\hline \text { Cost of Goods Sold } & 8,200 \\\hline \text { Direct Operating Expenses } & 1,000 \\\hline \text { Indirect Operating Expenses } & 2,300 \\\hline\end{array}$ The photography departmental gross profit on sales is: