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Exam 25: Departmentalized Profit and Cost Centers

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Question 41

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Some indirect costs may be allocated on the basis of departmental sales in proportion to total sales.

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B) False

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Question 42

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Using the information provided,determine and present in good form,the Gross Profit section of the Income Statement for Cody's Conundrums.

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Question 43

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Expenses that are closely related to a particular department and can easily be assigned to it during an accounting period are called

The area of accounting that provides financial information about individual segments,activities,or products of a business is called ____________________ accounting.

Department A had total sales of $40,000 and Department B had total sales of $10,000.If office salaries expense is allocated on the basis of total sales,____________________ percent would be used to determine the allocation for Department B.

Ace Company sells a variety of merchandise and wants to evaluate contribution margin by product line for Plumbing,Outdoor Products,and Hardware departments.Gross profit for each of these departments was $285,000;$78,000 and $137,000 respectively.Direct expenses for each department respectively were $122,000;$34,000;and $64,000.Indirect expenses were allocated to each department based on 70% of the direct expense for each segment.The contribution margin of Plumbing was:

Eliminating a department that has a negative contribution margin would result in ____________________ net income for the company than if the department were not eliminated.

Department B had net sales of $70,000,gross profit on sales of $35,000,total direct expenses of $9,000,and total indirect expenses of $6,000.Department B's contribution margin is

Using the information provided,determine and present in good form,the Cost of Goods Sold section of the Income Statement for Cody's Conundrums.

TBS Toys purchases a product from overseas including insurance and shipping costs for $65 per unit.TBS marks the toy up 30% to $84.50.Other traceable direct costs amount to $4.50 per unit.The indirect costs associated with this product amount to $45,000.How many toys must TBS sell in order to break even?

Data related to the income and expenses of Moffet Company for the year ended December 31,2016,are shown below.Use this information to prepare a departmental income statement showing contribution margin and net income of each department.

The telephone expense is allocated on the basis of floor space.Department A occupies 1,875 square feet and Department B occupies 625 square feet.If the telephone expense is $600,the amount allocated to Department A is

The difference between a department's gross profit on sales and its direct expenses is called ___________________.

Prestige Corporation has Sales of $98,500,Indirect Expenses of $26,000,Direct Expenses of $62,400,and Cost of Goods Sold of $49,600.What is Prestige Corporation's Contribution Margin?

Expenses that do not change in total with a fluctuation in volume of unit sales of a business are ____________________ expenses.

If a segment of business is considered a profit center

An example of a direct expense in a department store is

Complete the table of Uncollectible Accounts given below.

Which of the following is usually not departmentalized?

When a departmentalized income statement is to be prepared,the sales journal must be departmentalized.