Question 1

The breakfast department experienced the following revenue and expenses during October:   The breakfast departmental gross profit is:

Accepted Answer

A)  $8,000. 
B)  $12,000. 
C)  $6,000. 
D)  $18,000. 
A)  $8,000. 
B)  $12,000. 
C)  $6,000. 
D)  $18,000.

Question 2

Julia Company allocates its indirect advertising expenses based on each department's gross sales. If the men's apparel department has gross sales of $200,000 out of a total of $1,800,000 in gross sales, what percentage would Julia use to allocate its indirect advertising expenses?

Accepted Answer

A)  1/9 
B)  1/10 
C)  1/11 
D)  8/9 
A)  1/9 
B)  1/10 
C)  1/11 
D)  8/9

Question 3

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

Question 4

The following information is available for Charter Company:   Complete the following chart to determine the total cost for each department, using the most appropriate method to apportion the indirect costs.

Accepted Answer

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

Question 5

Compute net income for the housewares department, when gross profit is $680,000, direct expenses are $237,000, indirect expenses are $90,000 and sales are $890,000.

Accepted Answer

A)  -$210,000 
B)  $443,000 
C)  $590,000 
D)  $353,000 
A)  -$210,000 
B)  $443,000 
C)  $590,000 
D)  $353,000

Question 6

When a company tracks gross profit by department, the sales journal will:

Accepted Answer

A)  not differ from a company that does not track gross profit by department. 
B)  have a separate column for accounts receivable for each department. 
C)  have a separate column for sales for each department. 
D)  have a column for purchases for each department. 
A)  not differ from a company that does not track gross profit by department. 
B)  have a separate column for accounts receivable for each department. 
C)  have a separate column for sales for each department. 
D)  have a column for purchases for each department.

Question 7

The toy department of a department store would be a profit center.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

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

Question 9

A human resource department would be a revenue center.

Accepted Answer

A) True 
 B)False

Question 10

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 a general or specific common area. 
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 a general or specific common area. 
D)  None of these answers is correct.

Question 11

A maintenance department would be an example of a:

Accepted Answer

A)  cost center. 
B)  direct expense. 
C)  profit center. 
D)  petty cash. 
A)  cost center. 
B)  direct expense. 
C)  profit center. 
D)  petty cash.

Question 12

The CPC department of Alex shows gross sales of $735,000 for computer supplies and $935,000 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 $75,700 for the company and indirect expenses were $75,200. What was the contribution margin for the company?

Accepted Answer

A)  $644,600 
B)  $1,594,300 
C)  $1,670,000 
D)  $568,900 
A)  $644,600 
B)  $1,594,300 
C)  $1,670,000 
D)  $568,900

Question 13

Gross profit by department appears on the:

Accepted Answer

A)  balance sheet. 
B)  trial balance. 
C)  statement of cash flows. 
D)  income statement. 
A)  balance sheet. 
B)  trial balance. 
C)  statement of cash flows. 
D)  income statement.

Question 14

Buckeye Golf is considering dropping the clothing department because it is not generating a profit as disclosed by the following data:   Note: None of the indirect expenses can be avoided by dropping the department.
Should Buckeye drop the department? Show your computations.

Accepted Answer

At this point the department is contribu

Question 15

Departmental income statements would be a useful to tool for management to determine the viability of a department.

Accepted Answer

A) True 
 B)False

Question 16

Below is a list of departments; you are to identify each as either [1] a profit center or [2] a cost center.
-The repair center of a car dealership. ________

Accepted Answer

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

Question 17

Which of the following statements is true in regards to a profit center?

Accepted Answer

A)  A profit center incurs costs. 
B)  A profit center does not generate revenues. 
C)  A profit center generates revenue. 
D)  Both A and C 
A)  A profit center incurs costs. 
B)  A profit center does not generate revenues. 
C)  A profit center generates revenue. 
D)  Both A and C

Question 18

Advertising totaled $20,000; $1,000 was indirect. What would be the best choice to use to allocate the indirect cost?

Accepted Answer

A)  Allocate the indirect expense based on square feet. 
B)  Allocate the indirect expense based on gross sales. 
C)  Charge indirect expense to administrative expense. 
D)  Allocate the indirect expense based on goods shipped. 
A)  Allocate the indirect expense based on square feet. 
B)  Allocate the indirect expense based on gross sales. 
C)  Charge indirect expense to administrative expense. 
D)  Allocate the indirect expense based on goods shipped.

Question 19

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

Accepted Answer

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

Question 20

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

Exam 24: Departmental Accounting

The breakfast department experienced the following revenue and expenses during October: The breakfast departmental gross profit is:

Julia Company allocates its indirect advertising expenses based on each department's gross sales. If the men's apparel department has gross sales of $200,000 out of a total of $1,800,000 in gross sales, what percentage would Julia use to allocate its indirect advertising expenses?

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.

The following information is available for Charter Company: Complete the following chart to determine the total cost for each department, using the most appropriate method to apportion the indirect costs.

Compute net income for the housewares department, when gross profit is $680,000, direct expenses are $237,000, indirect expenses are $90,000 and sales are $890,000.

When a company tracks gross profit by department, the sales journal will:

The toy department of a department store would be a profit center.

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

A human resource department would be a revenue center.

Direct expenses are those expenses that:

A maintenance department would be an example of a:

Gross profit by department appears on the:

Buckeye Golf is considering dropping the clothing department because it is not generating a profit as disclosed by the following data: Note: None of the indirect expenses can be avoided by dropping the department. Should Buckeye drop the department? Show your computations.

Departmental income statements would be a useful to tool for management to determine the viability of a department.

Below is a list of departments; you are to identify each as either [1] a profit center or [2] a cost center. -The repair center of a car dealership. ________

Which of the following statements is true in regards to a profit center?

Advertising totaled $20,000; $1,000 was indirect. What would be the best choice to use to allocate the indirect cost?

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

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

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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