Exercise 3.18 Frida's Tax Practice has two departments, tax and audit. The tax department has two product lines, business returns and individual returns. A list of costs and three cost objects from Frida's Tax Practice follow. Required For each cost, identify whether it is direct (D) or indirect (I) for each cost object. Cost object Mr Gruper's Tax Personal personal tax Cost department returns return (a) Subscription to personal tax law updates publication (b) Ink supplies for tax department photocopy machine (c) Portion of total rent for tax department office space (d) Wages for tax department administrative assistant (e) Tax partner's salary (f) Charges for long distance call to Mr Gruper about personal tax return questions (g) Tax partner lunch with Mr Gruper (the tax partner has lunch with each client at least once

Exercise 3.18 Frida's Tax Practice has two departments, tax and audit. The tax department has two product lines, business returns and individual returns. A list of costs and three cost objects from Frida's Tax Practice follow. Required For each cost, identify whether it is direct (D) or indirect (I) for each cost object. Cost object Mr Gruper's Tax Personal personal tax Cost department returns return (a) Subscription to personal tax law updates publication (b) Ink supplies for tax department photocopy machine (c) Portion of total rent for tax department office space (d) Wages for tax department administrative assistant (e) Tax partner's salary (f) Charges for long distance call to Mr Gruper about personal tax return questions (g) Tax partner lunch with Mr Gruper (the tax partner has lunch with each client at least once

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 6PA: Using the information from BDS Enterprises, prepare the income statement to include all costs, but...

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Using the information from BDS Enterprises, prepare the income statement to include all costs, but separate out uncontrollable costs. Insert subtotals where appropriate (include one for operating income) before the uncontrollable costs. Income tax expense should be based on all expenses (that is, it will be the same amount as in question 1). Calculate net income, profit margin, ROI, and RI, excluding uncontrollable expenses. Prepare a short response to accompany the income statement that explains why uncontrollable costs are separated in the income statement.
Accounting Question
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