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Exam 25: Departmentalized Profit and Cost Centers

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Question 41

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Fill in the blanks where indicated in the partial Income Statement that follows.

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Question 42

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Departments that provide services to other departments of the firm are often organized as ____________________ centers.

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Question 43

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Which of the following is NOT a limitation to using departmental operating income?

Department A had total sales of $84,000 and Department B had total sales of $36,000. Other Office Expenses, totaling $2,500, are allocated on the basis of total sales. The amount allocated to Department A is

Department A had total sales of $84,000 and Department B had total sales of $36,000. Other Office Expenses, totaling $2,500, are allocated on the basis of total sales. The amount allocated to Department B is

City Shoe's loss from uncollectible accounts is estimated to be one-half of 1 percent of net credit sales. Using the financial data given below, compute the amount allocated to each department. Credit sales: (1) Women's Shoes, $278,200 (2) Men's Shoes, $185,800 (3) Children's Shoes, $116,000 Sales returns and allowances (credit sales): (1) Women's Shoes, $2,200 (2) Men's Shoes, $1,800 (3) Children's Shoes, $1,000

In departmental accounting, expenses that can be closely identified with an individual department are referred to as ____________________ expenses.

The Whippleton Department had gross profit on sales of $120,000, contribution margin of $60,000, total direct expenses of $18,000, and total indirect expenses of $52,000. The Whippleton Department has

City Shoe's custodial expense for the year totaled $7,000 and is to be allocated on the basis of the floor space occupied by each department. Using the financial data given below, compute the amount allocated to each department. Floor space occupied: (1) Women's Shoes, 6,615 sq. ft. (2) Men's Shoes, 5,145 sq. ft. (3) Children's Shoes, 2,940 sq. ft.

The basic principle of ____________________ accounting is that management should be able to evaluate the performance of each segment of the business and pinpoint responsibility for its financial results.

Traditional financial statements may not contain adequate information for managing a business.

The Copying Department occupied 9,000 square feet of space and the Printing Department occupied 6,000 square feet of space in the same building. If janitorial costs for the building were $12,000, then the amount that the Copying Department would be allocated for janitorial services would be ________________.

The purchasing, information systems, and maintenance departments are examples of profit centers of a company.

Some indirect costs may be allocated on the basis of departmental sales in proportion to total sales.

-Using the information provided, determine and present in good form, the Operating Revenue section of the Income Statement for Cody's Conundrums.

Unit Manufacturing Company has a Northeast Division, a Central Division and a Southwest Division and a travel department which supports the employees in all three divisions. The $144,000 in travel department expenses is allocated to the divisions based on the number of reservations required by each of the divisions. If the Northeast Division requires 1,700 reservations and the Central Division requires 2,800 reservations, and the Southwest Division requires 3,500 reservations, calculate the amount of travel department costs that will be allocated to each of the divisions.

When a company has departmentalized profit and cost centers each of the following is reported separately except for

City Shoe's insurance expense for the year totaled $6,300 and is to be allocated on the basis of the book value of inventory and equipment in each department. Using the financial data given below, compute the amount allocated to each department. Book value of inventory and equipment: (1) Women's Shoes, $79,800 (2) Men's Shoes, $69,300 (3) Children's Shoes, $60,900

In a store with several sales departments, departmentalized accounts would be used for

The amount of floor space occupied by each department is a common basis for allocating rent expense or utilities expense.