College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Question
Chapter 25, Problem 5SEB
To determine
Ascertain the departmental operating income for both the departments.
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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
Use 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…
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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- 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.arrow_forwardINCOME STATEMENT WITH DEPART MENTAL GROSS PROFIT AND OPERATING INCOME Thomas and Hill Distributors has divided its business into two departments: commercial sales and industrial sales. The following information is provided for the year ended December 31, 20--: REQUIRED 1. Prepare an income statement showing departmental gross profit and total operating income. 2. Calculate departmental gross profit percentages.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
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- In each blank next to the following terms, place the identifying letter of its best description.arrow_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_forwardInterdepartmental 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: Personnel Payroll Housewares Clothing Furniture Direct department cost $ 7,800 $ 3,200 $ 12,200 $ 20,000 $ 16,750 Number of employees 5 4 8 16 4 Gross payroll $ 6,000 $ 3,300 $ 10,600 $ 17,400 $ 8,100 (a) Determine the percentage of total Personnel Department services that was provided to the Payroll Department. (Round your answer to one decimal place.) % (b) Determine the percentage of total Payroll Department services that was provided to the…arrow_forward
- Departmental direct operating margin is the difference between a departments gross profit and its direct operating expenses.arrow_forwardINCOME STATEMENT WITH DEPART MENTAL GROSS PROFIT AND OPERATING INCOME Bacon and Hand Distributors has divided its business into two departments: retail sales and wholesale sales. The following information is provided for the year ended December 31, 20--: REQUIRED 1. Prepare an income statement showing departmental gross profit and total operating income. 2. Calculate departmental gross profit percentages.arrow_forwardWhich of the following represents the components of the income statement for a manufacturing business? A. Sales Revenue - Cost of Goods Sold = gross profit B. Service Revenue - Operating Expenses = gross profit C. Service Revenue - Cost of Goods Manufactured = gross profit D. Sales Revenue - Cost of Goods Manufactured = gross profitarrow_forward
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