Exam 25: Departmental Accounting

The PJC department of McIntyre Company shows gross sales of $730,600 for computer supplies and $934,900 for general office supplies. It has determined that computer supplies cost $534,000 and that general office supplies cost $391,400. What is the gross profit percentage for the computer supplies section of the PJC department?

A higher departmental gross profit or gross profit percentage means that a department is more profitable overall.

Wadsworth Distribution Company has total advertising expenses of $84,000: $32,000 for radio and $52,000 for print advertising. The expense for print advertising is allocated to Department A and Department B based on the total of net sales represented by each department. The total net sales for Wadsworth Distribution Company is $744,000. The net sales generated are $558,000 and $186,000 for Department A and B, respectively. How much of the expense for print advertising should be allocated to Department A?

The PJC department of McIntyre Company shows gross sales of $730,600 for computer supplies and $934,900 for general office supplies. It has determined that computer supplies cost $534,000 and that general office supplies cost $391,400. What is the total gross profit for the PJC department?

Indirect expenses are incurred for the benefit of the business as a whole and cannot be traced directly to a specific department.

A department should be discontinued if it has

Match the terms with the definitions. -The assignment and allocation of departmental operating expenses, which shows the classification of each operating expense as direct or indirect, the amount assigned or allocated to each department, and total operating expenses for each department.

Indirect expenses are allocated to specific departments to determine departmental direct operating margins.

Athletic Apparel and Sports Supplies are departments of World of Sports. Sheila manages both departments and employs three experts. Falana works full-time at Athletic Apparel and receives $1,000 each month; Carlos was originally hired to work full-time at Sports Supplies, but now works 60% of the time at Athletic Apparel and 40% of the time at Sports Supplies and receives $1,200 each month; Ana works full-time at Sports Supplies and receives $1,100 each month. To compute departmental operating income, how much salary expense would Sheila record?

Departmental direct operating margin also shows a department's contribution to the company's overall operating income.

To compute departmental operating income, it is necessary to determine the gross profit and the operating expenses of each department.

A departmental income statement showing gross profit can help management identify problems with both the sales prices and purchase prices of its products.

Direct expenses are assigned to departments based on

The sales, gross profit, and direct and indirect operating expenses of Departments A and B of Wilmont Corporation are as follows: Dept. A Dept. B Total Sales \ \ \ 71 Gross profit 270,000 180,000 450,000 Direct operating expenses 174,000 96,000 270,000 Indirect operating expenses 90,000 Required: Compute the departmental direct operating margin and direct operating margin percentage for each department.

The difference between a department's net sales and cost of goods sold is known as the

All of the following are used to compute gross profit EXCEPT

A departmental operating expense summary typically shows both direct and indirect expenses for each department.

A lower gross profit or gross profit percentage (by one department compared to another) means that one department is less profitable than another.

Many expenses of the entire business may be allocated to departments on a percentage basis.

A department often uses a specialized sales journal to separate the revenue derived from its various products or services.