Question 1

Which of the following would not be considered a direct expense for a shoe department in a department store?

Accepted Answer

A) Building expenses 
B) Advertising expense 
C) Administrative expense 
D) All of the above

Question 2

If gross sales for the tools department are $500,000 and gross sales for the appliances department are $300,000,what is the fraction used to apportion the indirect advertising for the appliances department if it is based on gross sales?

Accepted Answer

A) 1/2 
B) 1/3 
C) 3/8 
D) 2/3

Question 3

The espresso department experienced the following revenue and expenses during October:
$$\begin{array} { | l | r | } 
\hline \text { Sales } & \$ 15,000 \
\hline \text { Cost of Goods Sold } & 11,000 \
\hline \text { Direct Operating Expenses } & 2,000 \
\hline \text { Indirect Operating Expenses } & 1,000 \
\hline
\end{array}$$
The espresso departmental gross profit is:

Accepted Answer

A) $1,000. 
B) $4,000. 
C) $8,000. 
D) $2,000.

Question 4

Wages paid to the restaurant wait staff.________

Accepted Answer

The answer of Wages paid to the restaurant wait staff.________...

Question 5

General expenses are:

Accepted Answer

A) indirect expenses. 
B) direct expenses. 
C) not broken down by department. 
D) All of these answers are correct.

Question 6

In departmental accounting,it is necessary to break down revenue and expenses by departments.

Accepted Answer

A) True 
 B)False

Question 7

On a departmental income statement,contribution margin minus total indirect expenses equals:

Accepted Answer

A) departmental contribution margin. 
B) net income. 
C) income before taxes. 
D) income taxes.

Question 8

Sales minus cost of goods sold yields:

Accepted Answer

A) operating expenses. 
B) gross profit. 
C) income before taxes. 
D) net income.

Question 9

A cost center is evaluated on the amount of costs it incurs.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

What is the total gross profit of the company if there are three departments (A,B,and C)and the net sales are $200,000,$174,000,and $286,000,respectively,and cost of goods sold is $86,000,$92,000,and $82,000,respectively?

Accepted Answer

A) $390,000 
B) $650,000 
C) $400,000 
D) $260,000

Question 12

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.

Question 13

All of the following are used to compute gross profit except:

Accepted Answer

A) sales. 
B) sales returns and allowances. 
C) accounts receivable. 
D) purchases.

Question 14

A department should always be eliminated when it becomes unprofitable.

Accepted Answer

A) True 
 B)False

Question 15

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.________

Accepted Answer

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

Question 16

In a department store,the men's clothing section would be a(n):

Accepted Answer

A) profit center. 
B) direct expense. 
C) cost center. 
D) indirect expense.

Question 17

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

Accepted Answer

A) Cost of goods sold 
B) Use of general supplies by everyone 
C) Salaries and wages 
D) Merchandise purchases

Question 18

The PPC department of Ajax shows gross sales of $730,600 for computer supplies and $934,900 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 $75,200 for the company and indirect expenses were $75,200.What was the contribution margin for the company?

Accepted Answer

A) $640,100 
B) $583,500 
C) $489,700 
D) $564,900

Question 19

The administrative department of a mall is a(n):

Accepted Answer

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

Question 20

The photography department in a department store experienced the following revenue and expenses during October:
$$\begin{array} { | l | r | } 
\hline \text { Sales } & \$ 23,200 \
\hline \text { Cost of Goods Sold } & 10,200 \
\hline \text { Direct Operating Expenses } & 1,000 \
\hline \text { Indirect Operating Expenses } & 2,300 \
\hline
\end{array}$$
The photography departmental gross profit is:

Accepted Answer

A) $12,000. 
B) $20,200. 
C) $13,000. 
D) $9,700.

Exam 24: Departmental Accounting

Which of the following would not be considered a direct expense for a shoe department in a department store?

If gross sales for the tools department are $500,000 and gross sales for the appliances department are $300,000,what is the fraction used to apportion the indirect advertising for the appliances department if it is based on gross sales?

Wages paid to the restaurant wait staff.________

General expenses are:

In departmental accounting,it is necessary to break down revenue and expenses by departments.

On a departmental income statement,contribution margin minus total indirect expenses equals:

Sales minus cost of goods sold yields:

A cost center is evaluated on the amount of costs it incurs.

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

What is the total gross profit of the company if there are three departments (A,B,and C) and the net sales are $200,000,$174,000,and $286,000,respectively,and cost of goods sold is $86,000,$92,000,and $82,000,respectively?

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

All of the following are used to compute gross profit except:

A department should always be eliminated when it becomes unprofitable.

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.________

In a department store,the men's clothing section would be a(n) :

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

The administrative department of a mall is a(n) :