College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 25, Problem 8SPA
INCOME STATE MENT WITH DEPARTMENTAL OPERATING INCOME AND TOTAL OPERATING INCOME Alexa Cole owns a business called Alexa’s Bakery. She has divided her business into two departments: breads and pastries. The following information is provided for the fiscal year ended June 30, 20--:
REQUIRED
1. Prepare an income statement showing departmental operating income and total operating income.
2. Calculate departmental operating expense and operating income percentages.
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Cost Department Allocations
In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $48,108, and the Purchasing Department had expenses of $25,080 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records:
Line Item Description
Residential
Commercial
Government Contract
Sales
$524,000
$695,000
$1,595,000
Number of employees:
Weekly payroll (52 weeks per year)
115
80
85
Monthly payroll
38
49
36
Number of purchase requisitions per year
2,400
1,700
1,600
Required:
a. Determine the total amount of payroll checks and purchase requisitions processed per year by the…
2. The following is a partially completed lower section of a departmental expense allocation for
Cozy Bookstore. It reports the total amounts of direct and indirect expenses allocated to its five
departments. Allocate the expenses of the two service departments (advertising and purchasing)
to the three operating departments and provide the complete income statement.
Allocatlon of Expenses to Departments
Еxpense
Account Bal.
Advertising
Dept.
Purchasing
Dept.
Books
Magazines
Dept.
Newspapers
Dept.
Allocation Base
Dept.
$698,000
$24,000
$34,000
$425,000
$90,000
$125,000
Total department expenses..
Service department expenses
Advertising department.
Purchasing department.
Total expenses allocated to
operating departments..
Sales
?
.Purch, orders
Advertising and purchasing department expenses are allocated to operating departments
on the basis of dollar sales and purchase orders, respectively. Information about the
allocation bases for the three operating departments follows.
Department…
Divisional income statements with support department allocations
Horton Technology has two divisions. Consumer and Commercial and two corporate support departments, Tech Services and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows:
ACCT 102 Chapter 24 - Homework assignment take frame
Teen Services Department
2770,000
292,000
Purchasing Department
Other corporate
administrative expenses
Total expense
The other corporate administrative expenses include officers' salaries and other expenses required by the corporation. The Tech Services Department allocates costs to the divisions based on the number of computers in the department, and the Purchasing Department allocates costs to the divisions
based on the number of purchase orders for each department. The services used by the two divisions are as follows:
Consumer
Division
Commercial
Division
Total
Tech
Services
$1,519,500
260
410
computers
670
457,000
Purchasing
5,100 purchase
orders
1,322,900…
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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