Exam 24: Departmental Accounting

Sports Galore 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.

Normally, the report prepared for a department is a(n):

To determine how each profit center is performing, management would analyze the:

A profit center and a cost center both generate revenue.

Advertising expense totaled $40,000. If indirect advertising costs are allocated based on gross sales per department, what amount would be allocated to the Jewelry department if $10,000 of advertising is indirect? Gross Sales: Jewelry, $60,000; Glassware, $50,000; Watches, $40,000.

If the gross sales for the computer department are $3,700 and the book department gross sales are $6,300, what is the allocation for advertising expense of $750 to these departments, based on gross sales?

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

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

Departmental income statements are prepared to indicate how well each department is performing.

A department should always be eliminated when it becomes unprofitable.

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

Compute net income for the housewares department, when gross profit is $550,000, direct expenses $235,000, indirect expenses are $110,000 and sales are $875,000.

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

If there is a total of 50,000 square feet of floor space, and the hardware department utilizes 12,500 square feet, what percent of the total square footage is in hardware?

Advertising expense totaled $20,000. If indirect advertising costs are allocated based on gross sales per department, what amount would be allocated to the glassware department if $5,000 of advertising is indirect? Gross Sales: jewelry, $80,000; glassware, $30,000; watches, $40,000.

Which of the following would be a direct expense?

To calculate departmental gross profit, separate accounts should be set up for Sales, Purchases, etc., for each department.

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

Calculate a department's gross profit on sales given the following:

The women's shoe department shows gross sales of $245,000 with the cost of the shoes $147,000. The men's shoe department shows gross sales of $184,000 with the cost of the shoes $110,000. What is the gross profit for each department respectively?