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Exam 24: Departmental Accounting

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Question 71

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If an expense is traceable to a department, it would be considered a(n) :

A) direct expense.
B) indirect expense.
C) profit center issue.
D) advertising expense.

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Question 72

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A net income would occur if the contribution margin is greater than indirect expenses.

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Question 73

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The availability of suppliers and a firm's potential capacity is a consideration before a department is added.

Indirect expenses are normally:

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

On a departmental income statement, sales less cost of goods sold and direct expenses equals:

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

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

If the music department in a department store is 10,000 square feet and the total square feet is 80,000, how much of the total building cost of $50,000 will be allocated to music?

Below is a list of departments; you are to identify each as either [1] a profit center or [2] a cost center. -The maintenance office of a mall. ________

Indirect expenses are the same across departments and industries.

The accountant must always consider cost of goods sold when determining gross profit for a department.

Departmental accounting requires:

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

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

Which of the following statements is false as it relates to direct and indirect expenses?

If the cosmetic department in the store measures 20,000 square feet and the total building cost is $90,000 for a 40,000 square foot building, the cost that would be allocated to the cosmetic department would be:

A department should not be eliminated just because it becomes unprofitable.

Most companies that prepare departmental income statements typically don't prepare departmental balance sheets.

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