Exam 24: Departmental Accounting

What is the total gross profit of the company if there are three departments (A, B, and C) and the net sales are $210,000, $178,000, and $289,000, respectively, and cost of goods sold is $135,000, $142,000, and $125,000, respectively?

Below is a list of departments; you are to identify each as either [1] a profit center or [2] a cost center. -The housekeeping department for a hotel chain. ________

Eliminating one department may increase the sales of another department.

Which of the following would be a direct expense for a shoe department in a department store?

When a department showing a loss is eliminated, other departments will always achieve a greater contribution margin.

A cost center only generates revenues.

Of two departments, the men's department has 10,000 square feet and the women's department has 24,000 square feet. Depreciation is divided by square footage. If total depreciation is $70,000, the total amount allocated to the men's department would be approximately $56,000.

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense. -Paint used by painting department. ________

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense. -Wages paid to the restaurant wait staff. ________

Supporters of the contribution margin approach believe that:

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense. -General employee insurance. ________

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

Below is a list of expenses (direct and indirect). You are to determine the total direct cost for departments A and B. Direct cost for department A $ ________ B $ ________

A company has four departments (A, B, C and D) and the net sales are $30,000; $50,000; $60,000 and $35,000 respectively. The cost of goods sold per department is $25,000; $15,000; $40,000 and $15,000 respectively. What department has the lowest dollar gross profit?

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense. -Paint for the restaurant dining room. ________

Compute the contribution margin for the video department, when gross profit is $990,000, direct expenses $290,000, and indirect expenses are $120,000.

Why would it be advisable for a company to keep separate accounting records for various departments?

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense. -Electricity for the general lighting in a department store. ________

The Popper's candy department experienced the following revenue and expenses during October: The candy departmental net income is:

A building's depreciation would be considered an indirect expense.