Question 1

Indirect expenses cannot be allocated to departments based on the cost of goods sold in each department.

Accepted Answer

A) True 
 B)False

Question 2

The photography department in a department store experienced the following revenue and expenses during September:  
 The photography departmental gross profit is:

Accepted Answer

A)  $12,700. 
B)  $22,800. 
C)  $13,700. 
D)  $10,700. 
A)  $12,700. 
B)  $22,800. 
C)  $13,700. 
D)  $10,700.

Question 3

The photography department in a department store experienced the following revenue and expenses during October:   The photography department's contribution margin is:

Accepted Answer

A)  $15,000. 
B)  $20,400. 
C)  $12,200. 
D)  $13,900. 
A)  $15,000. 
B)  $20,400. 
C)  $12,200. 
D)  $13,900.

Question 4

If there is a total of 100,000 square feet of floor space, and the hardware department utilizes 30,000 square feet, what percent of the total square footage is in hardware?

Accepted Answer

A)  15% 
B)  7.5% 
C)  30% 
D)  60% 
A)  15% 
B)  7.5% 
C)  30% 
D)  60%

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Indirect expenses are those expenses that:

Accepted Answer

A)  can be controlled by a department manager. 
B)  can be identified with a specific department. 
C)  are incurred for the general benefit of a company. 
D)  All of these answers are correct. 
A)  can be controlled by a department manager. 
B)  can be identified with a specific department. 
C)  are incurred for the general benefit of a company. 
D)  All of these answers are correct.

Question 7

A line on the income statement that indicates what a department has left after covering cost of goods and sold and direct expenses is:

Accepted Answer

A)  the gross margin. 
B)  the net income. 
C)  the contribution margin. 
D)  None of these answers is correct. 
A)  the gross margin. 
B)  the net income. 
C)  the contribution margin. 
D)  None of these answers is correct.

Question 8

Explain the difference between a "cost center" and a "profit center."

Accepted Answer

A cost center is a unit or department th

Question 9

To calculate gross profit, subtract operating expenses from net sales.

Accepted Answer

A) True 
 B)False

Question 10

Department contribution margin equals gross profit on sales minus direct departmental expenses.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is NOT a direct departmental expense in a sales department?

Accepted Answer

A)  Salaries of Sales personnel 
B)  Delivery expense for unrelated items 
C)  Advertising for the sales department 
D)  Cost of promotional items 
A)  Salaries of Sales personnel 
B)  Delivery expense for unrelated items 
C)  Advertising for the sales department 
D)  Cost of promotional items

Question 12

A department with sales of $75,000 and cost of goods sold of $55,000 has a gross profit of $130,000.

Accepted Answer

A) True 
 B)False

Question 13

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 $30,000 of janitorial services be allocated? (Round your answer to the nearest dollar.)

Accepted Answer

A)  $16,500 to C; $6,000 to B; and $7,500 to A. 
B)  $16,500 to A; $6,000 to B; and $7,500 to C. 
C)  Split evenly ($10,000.00) to each department. 
D)  Cannot be determined by given information. 
A)  $16,500 to C; $6,000 to B; and $7,500 to A. 
B)  $16,500 to A; $6,000 to B; and $7,500 to C. 
C)  Split evenly ($10,000.00) to each department. 
D)  Cannot be determined by given information.

Question 14

Carla's building expenses, which are indirect, are based on each department's square footage. Department A occupies 35,000 square feet. Department B occupies 10,000 square feet, and Department C occupies 55,000 square feet. If the building expenses total $230,000, how much is allocated to Department B? (Round your answer to the nearest dollar.)

Accepted Answer

A)  $35,385 
B)  $23,000 
C)  $51,111 
D)  $76,667 
A)  $35,385 
B)  $23,000 
C)  $51,111 
D)  $76,667

Question 15

Athletics For All is trying to allocate its building's depreciation based on floor space. Determine the amount that should be assigned to the golf department and to the basketball department.

Accepted Answer

Apportionment of depreciation

Question 16

A department with sales of $130,000; cost of goods sold of $75,000; and operating expenses of $20,000 has a gross profit of $25,000.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense.
-Rent paid for the freezers in the frozen foods department of a food store. ________

Accepted Answer

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

Question 19

A company has three departments (A, B, and C) and the net sales are $370,000; $400,000; and $285,000 respectively. The cost of goods sold per department is $291,000; $360,000; and $245,000 respectively. What department has the highest gross profit?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  Both departments A and B 
A)  A 
B)  B 
C)  C 
D)  Both departments A and B

Question 20

A unit or department that incurs costs and generates revenues is known as a:

Accepted Answer

A)  cost center. 
B)  profit center. 
C)  revenue center. 
D)  corporate center. 
A)  cost center. 
B)  profit center. 
C)  revenue center. 
D)  corporate center.

Exam 24: Departmental Accounting

Indirect expenses cannot be allocated to departments based on the cost of goods sold in each department.

The photography department in a department store experienced the following revenue and expenses during September: The photography departmental gross profit is:

The photography department in a department store experienced the following revenue and expenses during October: The photography department's contribution margin is:

If there is a total of 100,000 square feet of floor space, and the hardware department utilizes 30,000 square feet, what percent of the total square footage is in hardware?

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

Indirect expenses are those expenses that:

A line on the income statement that indicates what a department has left after covering cost of goods and sold and direct expenses is:

Explain the difference between a "cost center" and a "profit center."

To calculate gross profit, subtract operating expenses from net sales.

Department contribution margin equals gross profit on sales minus direct departmental expenses.

Which of the following is NOT a direct departmental expense in a sales department?

A department with sales of $75,000 and cost of goods sold of $55,000 has a gross profit of $130,000.

Athletics For All is trying to allocate its building's depreciation based on floor space. Determine the amount that should be assigned to the golf department and to the basketball department.

A department with sales of $130,000; cost of goods sold of $75,000; and operating expenses of $20,000 has a gross profit of $25,000.

What is the purpose for determining contribution margin?

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense. -Rent paid for the freezers in the frozen foods department of a food store. ________

A company has three departments (A, B, and C) and the net sales are $370,000; $400,000; and $285,000 respectively. The cost of goods sold per department is $291,000; $360,000; and $245,000 respectively. What department has the highest gross profit?

A unit or department that incurs costs and generates revenues is known as a:

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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