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Exam 25: Departmentalized Profit and Cost Centers

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Question 21

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The departments of Cacophony Music Company are listed below. For each, determine whether it is a cost center or a profit center. -Instrument Repair Department

A) Cost
B) Profit

C) A) and B)
D) undefined

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Question 22

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Department A had total sales of $60,000 and Department B had total sales of $20,000. If office salaries expense is allocated on the basis of total sales,---------- percent of the office salaries expense would be allocated to Department B.

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Question 23

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The departments of Cacophony Music Company are listed below. For each, determine whether it is a cost center or a profit center. -CDs and Tapes Department

Which of the following measurements provides a better basis for eliminating a department?

Eliminating a department that has a negative contribution margin would result in------------------ net income for the company than if the department were not eliminated.

Department A had total sales of $84,000 and Department B had total sales of $36,000. Other Office Expenses, totaling $3,100, are allocated to the departments based on total sales. -The amount of Other Office Expense allocated to Department A is:

When a departmentalized income statement is prepared, the sales journal must also be departmentalized.

The contribution margin of a department is the difference between:

The procedure for assigning indirect expenses to departments at the end of an accounting period is called

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

TBS Toys purchases a product from overseas, including insurance and shipping costs, for $62 per unit. TBS marks the toy up by 35% to $83.70. Other traceable direct costs amount to $4.10 per unit. The indirect costs associated with this product amount to $51,920. How many toys must TBS sell in order to break even?

Use the following information for the questions. Cody's Conundrums Income Statement Accounts (Partial) September 30, 2019 -Using the information provided, determine and present in good form, the Cost of Goods Sold section of the Income Statement for Cody's Conundrums.

Operating expenses that cannot be easily assigned to particular departments at the time transactions occur and are recorded are------------ expenses.

A common way to allocate janitorial wages to various departments would be on the basis of------------.

Department B had net sales of $70,000, gross profit on sales of $32,000, total direct expenses of $10,200, and total indirect expenses of $5,800. Department B's contribution margin is:

The departments of Cacophony Music Company are listed below. For each, determine whether it is a cost center or a profit center. -Recording Studio

Which of the following enables management to evaluate the performance of each business segment?

The fixed expenses of a business total $41,800. The company sells only one product for $46 per unit. The corresponding variable cost of the item sold is $24 per unit. To breakeven, the company must sell---------- units.

Eldercare One, Two and Three are managed as a profit centers by the parent company. Revenues were $1,200,000, $500,000 and $300,000, respectively, and patients numbered 270, 80 and 50, respectively. Insurance costs of $625,000 are allocated to each center based on number of patients. Eldercare Two would be allocated cost of:

Expenses that are closely related to the activities in each department, but cannot be allocated to any specific department are----------- expenses.