Question 1

Departmental reports are not useful for:

Accepted Answer

A) determining performance. 
B) determining future revenue. 
C) controlling. 
D) All of the above are correct. 
A) determining performance. 
B) determining future revenue. 
C) controlling. 
D) All of the above are correct.

Question 2

When a company tracks gross profit by department,the sales journal has one column for Sales for each department.

Accepted Answer

A) True 
 B)False

Question 3

The following information is available for Charter Company:
 $$\begin{array} { | c | r | r | r | } 
\hline  { \text { Item } } & \text { Department1 } & \text { Department 2 } &  { \text { Total } } \
\hline \text { Equipment value } & \$ 500,000 & \$ 250,000 & \$ 750,000 \
\hline \text { Square footage } & 25,000 \text { sq.ft. } & 35,000 \text { sq.ft. } & 60,000 \text { sq.ft } \
\hline \text { Sales } & \$ 1,250,000 & \$ 725,000 & \$ 1,975,000 \
\hline
\end{array}$$ 
Complete the following chart to determine the total cost for each department,using the most appropriate method to apportion the indirect costs.
 $$\begin{array} { | l | r | r | r | } 
\hline  { \text { Cost } } & \text { Department 1 } & \text { Department 2 } &  { \text { Total } } \
\hline \text { Depreciation } & & & \$ 120,000 \
\hline \text { Utilities } & & & \$ 45,000 \
\hline \text { Sales Commissions } & & & \$ 59,250 \
\hline \text { Rent } & & & \$ 150,000 \
\hline \text { TOTALS } & & & \$ 374,250 \
\hline
\end{array}$$

Accepted Answer

The answer of The following information is available for Charter...

Question 4

Windermere Corporation has 55,000 square feet in department A;20,000 square feet in department B;and 25,000 square feet in department C.Janitorial services are based on square footages in each department.How will the $35,000 of janitorial services be allocated?

Accepted Answer

A) $19,250 to C;$7,000 to B;and $8,750 to A. 
B) $19,250 to A;$7,000 to B;and $8,750 to C. 
C) Split evenly ($11,666.67)to each department. 
D) Cannot be determined by given information. 
A) $19,250 to C;$7,000 to B;and $8,750 to A. 
B) $19,250 to A;$7,000 to B;and $8,750 to C. 
C) Split evenly ($11,666.67)to each department. 
D) Cannot be determined by given information.

Question 5

The data processing department of a tax firm would be a cost center.

Accepted Answer

A) True 
 B)False

Question 6

Indirect expenses are allocated to departments based on:

Accepted Answer

A) decisions of the stockholders. 
B) directives from the board of directors. 
C) some reasonable basis,such as percent of sales. 
D) generally accepted accounting principles. 
A) decisions of the stockholders. 
B) directives from the board of directors. 
C) some reasonable basis,such as percent of sales. 
D) generally accepted accounting principles.

Question 7

Compute the contribution margin for the video department,when gross profit is $970,000,direct expenses $280,000,and indirect expenses are $190,000.

Accepted Answer

A) $320,000 
B) $690,000 
C) $510,000 
D) $700,000 
A) $320,000 
B) $690,000 
C) $510,000 
D) $700,000

Question 8

Of two departments,the men's department has 8,000 square feet and the women's department has 22,000 square feet.Depreciation is divided by square footage.If total depreciation is $50,000,the total amount allocated to the men's department would be approximately $36,667.

Accepted Answer

A) True 
 B)False

Question 9

Below is a list of departments; you are to identify each as either [1] a profit center or [2] a cost center.
-The jewelry department of a major retailer.________

Accepted Answer

The answer of Below is a list of departments; you...

Question 10

Indirect expenses may be allocated to departments based on the cost of goods sold in each department.

Accepted Answer

A) True 
 B)False

Question 11

Direct expenses are those expenses that:

Accepted Answer

A) can be identified with a specific department. 
B) cannot be identified with a specific department. 
C) can be identified with more than one department. 
D) None of these answers is correct. 
A) can be identified with a specific department. 
B) cannot be identified with a specific department. 
C) can be identified with more than one department. 
D) None of these answers is correct.

Question 12

Which allocation base is best used to allocate advertising expense by selling department?

Accepted Answer

A) Square feet of spaced used 
B) Gross sales of each department as a percent of total gross sales 
C) An even split among all selling departments 
D) Some other method not listed. 
A) Square feet of spaced used 
B) Gross sales of each department as a percent of total gross sales 
C) An even split among all selling departments 
D) Some other method not listed.

Question 13

Direct expenses and indirect expenses are not separated in determining contribution margin.

Accepted Answer

A) True 
 B)False

Question 14

Departmental accounting requires:

Accepted Answer

A) measuring departmental gross profit. 
B) allocating direct costs to departments. 
C) allocating indirect costs to departments. 
D) Both A and C are correct. 
A) measuring departmental gross profit. 
B) allocating direct costs to departments. 
C) allocating indirect costs to departments. 
D) Both A and C are correct.

Question 15

Paint used by painting department.________

Accepted Answer

The answer of Paint used by painting department.________...

Question 16

What is the purpose for determining contribution margin?

Accepted Answer

A) To show the contribution by department toward covering indirect costs 
B) To help determine whether or not to eliminate a department 
C) To show the effect on net income for each department 
D) All of these answers are correct. 
A) To show the contribution by department toward covering indirect costs 
B) To help determine whether or not to eliminate a department 
C) To show the effect on net income for each department 
D) All of these answers are correct.

Question 17

Which of the following indirect expenses would most likely be allocated on the basis of gross sales?

Accepted Answer

A) Rent expense 
B) Utilities expense 
C) Miscellaneous expense 
D) None of the above 
A) Rent expense 
B) Utilities expense 
C) Miscellaneous expense 
D) None of the above

Question 18

Which of the following would be a direct expense of a sales department?

Accepted Answer

A) Sales salaries 
B) Administrative expense 
C) Advertising expense 
D) Both A and C 
A) Sales salaries 
B) Administrative expense 
C) Advertising expense 
D) Both A and C

Question 19

Indirect expenses are not the same across departments and industries.

Accepted Answer

A) True 
 B)False

Question 20

The women's shoe department shows gross sales of $260,000 with the cost of the shoes $140,000.The men's shoe department shows gross sales of $170,000 with the cost of the shoes $110,000.What is the gross profit for each department respectively?

Accepted Answer

A) $430,000 and $250,000 
B) $90,000 and $30,000 
C) $120,000 and $60,000 
D) $390,000 and $310,000 
A) $430,000 and $250,000 
B) $90,000 and $30,000 
C) $120,000 and $60,000 
D) $390,000 and $310,000

Exam 24: Departmental Accounting

Departmental reports are not useful for:

When a company tracks gross profit by department,the sales journal has one column for Sales for each department.

Windermere Corporation has 55,000 square feet in department A;20,000 square feet in department B;and 25,000 square feet in department C.Janitorial services are based on square footages in each department.How will the $35,000 of janitorial services be allocated?

The data processing department of a tax firm would be a cost center.

Indirect expenses are allocated to departments based on:

Compute the contribution margin for the video department,when gross profit is $970,000,direct expenses $280,000,and indirect expenses are $190,000.

Of two departments,the men's department has 8,000 square feet and the women's department has 22,000 square feet.Depreciation is divided by square footage.If total depreciation is $50,000,the total amount allocated to the men's department would be approximately $36,667.

Below is a list of departments; you are to identify each as either [1] a profit center or [2] a cost center. -The jewelry department of a major retailer.________

Indirect expenses may be allocated to departments based on the cost of goods sold in each department.

Direct expenses are those expenses that:

Which allocation base is best used to allocate advertising expense by selling department?

Direct expenses and indirect expenses are not separated in determining contribution margin.

Departmental accounting requires:

Paint used by painting department.________

What is the purpose for determining contribution margin?

Which of the following indirect expenses would most likely be allocated on the basis of gross sales?

Which of the following would be a direct expense of a sales department?

Indirect expenses are not the same across departments and industries.

The women's shoe department shows gross sales of $260,000 with the cost of the shoes $140,000.The men's shoe department shows gross sales of $170,000 with the cost of the shoes $110,000.What is the gross profit for each department respectively?

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property,plant,equipment,and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Manufacturing Accounting

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