Question 1

Trends in the industry, such as advancements in technology, should always be a consideration in determining whether or not a department is eliminated.

Accepted Answer

A) True 
 B)False

Question 2

Prepare an income statement showing departmental contribution margin based on the following:

Accepted Answer

The answer of Prepare an income statement showing departmental contribution...

Question 3

Which of the following is not a direct departmental expense in a sales department?

Accepted Answer

A)  Sales salaries
B)  Delivery expense for related items
C)  Advertising for the sales department
D)  All are direct departmental expenses.E) A) and C)
F) A) and B)

Question 4

Calculate the costume jewelry department net income given the following:

Accepted Answer

A)  $1,300
B)  $1,000
C)  $300
D)  ($250) E) B) and C)
F) None of the above

Question 5

On a departmental income statement, contribution margin minus total indirect expenses equals:

Accepted Answer

A)  departmental contribution margin.
B)  net income.
C)  income before taxes.
D)  income taxes.E) A) and D)
F) None of the above

Question 6

Gross profit by department appears on the:

Accepted Answer

A)  balance sheet.
B)  statement of retained earnings.
C)  statement of cash flows.
D)  income statement.E) None of the above
F) A) and D)

Question 7

An example of a cost center is:

Accepted Answer

A)  a Holiday Inn.
B)  the restaurant in a motel.
C)  the administrative department in a motel.
D)  the catering department in a motel.E) A) and B)
F) A) and C)

Question 8

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. Direct expenses were $56,600 for the company and indirect expenses were $75,200. What was the contribution margin for the company?

Accepted Answer

A)  $640,100
B)  $583,500
C)  $508,300
D)  $564,900E) A) and B)
F) C) and D)

Question 9

The photography department in a department store experienced the following revenue and expenses during October:  The photography departmental gross profit on sales is:

Accepted Answer

A)  $3,100.
B)  $5,200.
C)  $6,000.
D)  $8,100.E) A) and D)
F) B) and D)

Question 10

All of the following are used to compute gross profit except:

Accepted Answer

A)  sales.
B)  sales returns and allowances.
C)  accounts receivable.
D)  purchases.E) A) and B)
F) B) and D)

Question 11

All of the following are used to compute gross profit except:

Accepted Answer

A)  sales.
B)  purchase returns and allowances.
C)  rent expense.
D)  purchases.E) A) and D)
F) A) and C) C

Question 12

In a department store, the men's clothing section would be a(n) :

Accepted Answer

A)  profit center.
B)  direct expense.
C)  cost center.
D)  indirect expense.E) A) and B)
F) None of the above

Question 13

Departmental accounting requires:

Accepted Answer

A)  measuring departmental gross profit.
B)  allocating direct costs to departments.
C)  allocating indirect costs to departments.
D)  None of these answers is correct.E) A) and B)
F) C) and D)

Question 14

Supporters of the contribution margin approach believe that:

Accepted Answer

A)  indirect expenses should be departmentalized.
B)  indirect expenses should not be used for evaluating departmental performance.
C)  indirect expenses are proportionally charged to each department.
D)  direct expenses should not be used in evaluating departmental performance.E) All of the above
F) B) and C)

Question 15

Which of the following expenses is the most difficult to allocate to departments?

Accepted Answer

A)  Cost of goods sold
B)  Use of general supplies by everyone
C)  Salaries and wages
D)  Merchandise purchasesE) A) and C)
F) B) and C) B

Question 16

In a cost center, the manager:

Accepted Answer

A)  has the responsibility for controlling costs, but not directly generating revenue.
B)  is not responsible for controlling costs, but is responsible for generating revenue.
C)  is responsible for controlling costs and generating revenue.
D)  None of these answers are correct.E) B) and C)
F) A) and D) A

Question 17

A company has four departments (A, B, C and D) and the net sales are $35,000; $40,000; $60,000 and $25,000 respectively. The cost of goods sold per department are $25,000; $15,000; $40,000 and $15,000 respectively. What department has the highest gross profit?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) B) and D)
F) A) and C)

Question 18

Direct expenses, such as salaries, can be traced to a particular department.

Accepted Answer

A) True 
 B)False

Question 19

A indirect expense should be traceable to a respective department.

Accepted Answer

A) True 
 B)False

Question 20

A department with sales of $120,000; cost of goods sold of $75,000; and operating expenses of $20,000 has a gross profit of $45,000.

Accepted Answer

A) True 
 B)False

Exam 24: Departmental Accounting

Trends in the industry, such as advancements in technology, should always be a consideration in determining whether or not a department is eliminated.

Correct Answer
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Prepare an income statement showing departmental contribution margin based on the following:

Correct Answer
verified

Which of the following is not a direct departmental expense in a sales department?

Correct Answer
verified

Calculate the costume jewelry department net income given the following:

Correct Answer
verified

On a departmental income statement, contribution margin minus total indirect expenses equals:

Correct Answer
verified

Gross profit by department appears on the:

Correct Answer
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An example of a cost center is:

Correct Answer
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Correct Answer
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The photography department in a department store experienced the following revenue and expenses during October: The photography departmental gross profit on sales is:

Correct Answer
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All of the following are used to compute gross profit except:

Correct Answer
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All of the following are used to compute gross profit except:

Correct Answer
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C

In a department store, the men's clothing section would be a(n) :

Correct Answer
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Departmental accounting requires:

Correct Answer
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Supporters of the contribution margin approach believe that:

Correct Answer
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Which of the following expenses is the most difficult to allocate to departments?

Correct Answer
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B

In a cost center, the manager:

Correct Answer
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A

A company has four departments (A, B, C and D) and the net sales are $35,000; $40,000; $60,000 and $25,000 respectively. The cost of goods sold per department are $25,000; $15,000; $40,000 and $15,000 respectively. What department has the highest gross profit?

Correct Answer
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Direct expenses, such as salaries, can be traced to a particular department.

Correct Answer
verified

A indirect expense should be traceable to a respective department.

Correct Answer
verified

A department with sales of $120,000; cost of goods sold of $75,000; and operating expenses of $20,000 has a gross profit of $45,000.

Correct Answer
verified

Exam 24: Departmental Accounting

Trends in the industry, such as advancements in technology, should always be a consideration in determining whether or not a department is eliminated.

Correct AnswerverifiedShow Answer

Prepare an income statement showing departmental contribution margin based on the following:

Correct AnswerverifiedShow Answer

Which of the following is not a direct departmental expense in a sales department?

Correct AnswerverifiedShow Answer

Calculate the costume jewelry department net income given the following:

Correct AnswerverifiedShow Answer

On a departmental income statement, contribution margin minus total indirect expenses equals:

Correct AnswerverifiedShow Answer

Gross profit by department appears on the:

Correct AnswerverifiedShow Answer

An example of a cost center is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The photography department in a department store experienced the following revenue and expenses during October: The photography departmental gross profit on sales is:

Correct AnswerverifiedShow Answer

All of the following are used to compute gross profit except:

Correct AnswerverifiedShow Answer

All of the following are used to compute gross profit except:

Correct AnswerverifiedC

In a department store, the men's clothing section would be a(n) :

Correct AnswerverifiedShow Answer

Departmental accounting requires:

Correct AnswerverifiedShow Answer

Supporters of the contribution margin approach believe that:

Correct AnswerverifiedShow Answer

Which of the following expenses is the most difficult to allocate to departments?

Correct AnswerverifiedB

In a cost center, the manager:

Correct AnswerverifiedA

A company has four departments (A, B, C and D) and the net sales are $35,000; $40,000; $60,000 and $25,000 respectively. The cost of goods sold per department are $25,000; $15,000; $40,000 and $15,000 respectively. What department has the highest gross profit?

Correct AnswerverifiedShow Answer

Direct expenses, such as salaries, can be traced to a particular department.

Correct AnswerverifiedShow Answer

A indirect expense should be traceable to a respective department.

Correct AnswerverifiedShow Answer

A department with sales of $120,000; cost of goods sold of $75,000; and operating expenses of $20,000 has a gross profit of $45,000.

Correct AnswerverifiedShow Answer

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C

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B

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A

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