College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Textbook Question
Chapter 25, Problem 5SEA
COMPUTING OPERATING INCOME The sales, cost of goods sold, and total operating expenses of departments A and B of Ash Company are as follows:
Compute the departmental operating income for each department.
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Direct expenses are assigned to departments based on
a.estimated expenses.
b.actual expenses.
c.the percentage of gross sales represented by each department.
d.the percentage of total net sales represented by each department.
Divisional Income Statements
1. Admin Expenses, Operating Income before Support Department Allocations, Sales, Suuport Department Allocations.
2. Admin Expenses, Cost of Goods Sold, Gross Profit, Support Department Allocations
3. Gross Profit, Operating Income, Sales, Support Department Allocations
4. Admin Expenses, Cost of Goods Sold, Gross Profit, Support Department Allocations
5. Cost of Goods Sold, Operating Income before Support Department Allocations, Sales, Support Department Allocations
6. Gross Profit, Loss from Operations, Sales, Support Department Allocations
7. Gross Profit, Loss from Operations, Operating Income, Operating Income before Support Department Allocations
The difference between a department’s net sales and cost of goods sold is called
(a) departmental gross profit.
(b) departmental direct operating income.
(c) departmental operating income.
(d) net income.
Chapter 25 Solutions
College Accounting, Chapters 1-27
Ch. 25 - A department that incurs costs and generates...Ch. 25 - Departmental gross profit is the difference...Ch. 25 - Prob. 3TFCh. 25 - Direct expenses are operating expenses incurred...Ch. 25 - Departmental direct operating margin is the...Ch. 25 - A department that incurs costs but does not...Ch. 25 - The difference between a departments net sales and...Ch. 25 - Prob. 3MCCh. 25 - The difference between a departments gross profit...Ch. 25 - The difference between a departments gross profit...
Ch. 25 - Prob. 1CECh. 25 - Prob. 2CECh. 25 - Prob. 3CECh. 25 - Prob. 1RQCh. 25 - Prob. 2RQCh. 25 - Prob. 3RQCh. 25 - Prob. 4RQCh. 25 - Prob. 5RQCh. 25 - Prob. 6RQCh. 25 - Prob. 7RQCh. 25 - Prob. 8RQCh. 25 - Distinguish between departmental gross profit,...Ch. 25 - Prob. 10RQCh. 25 - GROSS PROFIT SECTION OF DE PART MENT AL INCO ME ST...Ch. 25 - ALLOCATING OPERATING EXPENSESQUARE FEET Weaverling...Ch. 25 - ALLOCATING OPERATING EXPENSERELATIVE NET SALES...Ch. 25 - ALLOCATING OPERATING EXPENSEMILES DRIVEN Mercado...Ch. 25 - COMPUTING OPERATING INCOME The sales, cost of...Ch. 25 - Prob. 6SEACh. 25 - INCOME STATEMENT WITH DEPART MENTAL GROSS PROFIT...Ch. 25 - INCOME STATE MENT WITH DEPARTMENTAL OPERATING...Ch. 25 - INCOME STATEMENT WITH DEPART MENTAL DIRECT...Ch. 25 - Prob. 10SPACh. 25 - GROSS PROFIT SECTION OF DEPART MENTAL INCOME...Ch. 25 - Prob. 2SEBCh. 25 - ALLOCATING OPERATING EXPENSERELATIVE NET SALES...Ch. 25 - ALLOCATING OPERATING EXPENSEMILES DRIVEN Herbert...Ch. 25 - Prob. 5SEBCh. 25 - Prob. 6SEBCh. 25 - INCOME STATEMENT WITH DEPART MENTAL GROSS PROFIT...Ch. 25 - Prob. 8SPBCh. 25 - Prob. 9SPBCh. 25 - Prob. 10SPBCh. 25 - Prob. 1MYWCh. 25 - Prob. 1ECCh. 25 - MASTERY PROBLEM Bobs Acme Supermarket has been in...Ch. 25 - CHALLENGE PROBLEM This problem challenges you to...
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- Departmental direct operating margin is the difference between a departments gross profit and its direct operating expenses.arrow_forwardUse the following information to compute each department's contribution to overhead. Which department contributes the largest amount toward total overhead? Sales Cost of goods sold Gross profit Total direct expenses Department A $ 54,000 34,020 19,980 4,980 Department B $ 201,000 104,520 96,480 37,480 Department C $ 81,000 42,930 38,070 8,926 Complete this question by entering your answers in the tabs below. Contribution to Departmental Overhead Overhead Compute each department's contribution to overhead. Department A Department B Department C Contribution to overhead Use the following information to compute each department's contribution to overhead. Which department contributes the largest amount toward total overhead? Department A $ 54,000 34,020 Department B $ 201,000 104,520 96,480 37,480 Department C $ 81,000 Sales Cost of goods sold Gross profit Total direct expenses 19,980 4,980 42,930 38,070 8,926 Complete this question by entering your answers in the tabs below. Contribution…arrow_forwardNeed detail explanation. Explain departmental income statement and the criterion for division of indirect costs among departments. Provide an example from your own business experience or a hypothetical example in which at least three (3) indirect costs are divided among departments.arrow_forward
- Which accounts are examples of administrative costs? Select one: O A. Advertising and clerical costs B. Depreciation of office equipment and legal costs O C. Salaries of executives and sales commission D. Sales promotion costs and audit feesarrow_forward18. Which of the following would be an appropriate allocation base for support department costs associated with an accounting department? a. Number of accounting transactions processed b. Number of purchase requisitions prepared c. Square footage of the office space occupied by accounting d. Number of units of product soldarrow_forwardPlease explain departmental income statement and the criterion for division of indirect costs among departments. Provide a hypothetical example in which at least three (3) indirect costs are divided among departments.arrow_forward
- How much is the net operating income contributed to the company by Department A and B? Using the data above, what is the segment margin of Department A and B?arrow_forwardHow are overhead expenses allocated to particular departments? A. Strictly based on floor space B. Based on a ratio of space to sales volume C. Strictly based on sales volume D. By floor space or sales volume Please provide proper explanationarrow_forwardInterdepartment Services: Step Method O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments, Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation information for June is as follows: Direct department cost Number of employees Gross payroll Personnel Payroll Housewares Clothing Furniture $7,300 $3,800 $12,300 $20,000 $15,650 5 Total costs $ 2 $6,100 $2,800 Payroll 0 (a) Determine the percentage of total Personnel Department services that was provided to the Payroll Department. (Round your answer to one decimal place.) 12.5 X% (b) Determine the percentage of total Payroll Department services that was provided to the Personnel Department. (Round your answer…arrow_forward
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