91. Operating expenses directly traceable to or incurred for the sole benefit of a specific department and usually subject to the control of the department manager are termed:
A. miscellaneous administrative expenses
B. direct expenses
C. indirect expenses
D. fixed expenses
92. In evaluating the profit center manager, the income from operations should be compared:
A. across profit centers
B. to historical performance or budget
C. to the competitor’s net income
D. to the total company earnings per share
93. Income from operations of the Commercial Aviation Division is $2,225,000. If income from operations before service department charges is $3,250,000:
A. operating expenses are $1,025,000
B. total service department charges are $1,025,000
C. noncontrollable charges are $1,025,000
D. direct manufacturing charges are $1,025,000
94. The costs of services charged to a profit center on the basis of its use of those services are called:
A. operating expenses
B. noncontrollable charges
C. service department charges
D. activity charges
95. Division X reported income from operations of $975,000 and total service department charges of $575,000. Therefore:
A. net income was $400,000
B. the gross profit margin was $400,000
C. income from operations before service department charges was $1,550,000
D. consolidated net income was $400,000
96. To calculate income from operations, total service department charges are:
A. added to income from operations before service department charges
B. subtracted from operating expenses
C. subtracted from income from operations before service department charges
D. subtracted from gross profit margin
97. Income from operations for Division Z is $250,000, total service department charges are $400,000 and operating expenses are $2,266,000. What are the revenues for Division Z?
A. $650,000
B. $2,516,000
C. $2,916,000
D. $2,666,000
98. Income from operations for Division K is $220,000, and income from operations before service department charges is $975,000. Therefore:
A. total operating expenses are $755,000
B. total manufacturing expenses are $755,000
C. direct materials, direct labor, and factory overhead total $755,000
D. total service department charges are $755,000
99. The following data are taken from the management accounting reports of Dulcimer Co.:
Div. A
Div. B
Div. C
Income from operations
$1,900,000
$1,450,000
$1,450,000
Total service department charges
1,700,000
1,050,000
1,100,000
If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges, it follows that:
A. Division A’s manager is given the bonus
B. Division B’s manager is given the bonus
C. Division C’s manager is given the bonus
D. The managers of Divisions B and C divide the bonus
100. What is the term used to describe expenses that are incurred for the benefit of a specific department?
A. Indirect expenses
B. Margin expenses
C. Departmental expenses
D. Direct expenses
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