Question : 71.Department X began the current year with $20,000 in inventory. : 1169210

 

 

71.Department X began the current year with $20,000 in inventory. During the year, Department X net purchases amounted to $65,000 and its ending inventory was $12,000. Sales during the year totaled $170,000, other direct expenses were $37,000, and total indirect expenses of $25,000. Department B’s contribution margin is   

A. $35,000.

 

B. $37,000.

 

C. $60,000.

 

D. $97,000.

 

 

 

72.Department B had net sales of $70,000, gross profit on sales of $35,000, total direct expenses of $9,000, and total indirect expenses of $6,000. Department B’s net income is   

A. $20,000.

 

B. $29,000.

 

C. $26,000.

 

D. $35,000.

 

 

 

73.Department A had total sales of $84,000 and Department B had total sales of $36,000. Other Office Expenses, totaling $2,500, are allocated on the basis of total sales. The amount allocated to Department B is   

A. $750.

 

B. $1,750.

 

C. $1,250.

 

D. $1,071.

 

 

 

74.Department A had total sales of $84,000 and Department B had total sales of $36,000. Other Office Expenses, totaling $2,500, are allocated on the basis of total sales. The amount allocated to Department A is   

A. $750.

 

B. $1,750.

 

C. $1,250.

 

D. $1,071.

 

 

 

75.Taylor and King, CPAs installed a new computer system. When the needs of the various divisions were analyzed, it was determined that the Audit Division would require 40% of the capacity, the Tax Division would require 25% of the capacity, and the Business Consulting Division would require 35% of the capacity. The computer system will cost $240,000.How much of the computer system’s cost will be allocated to the Tax Division?   

A. $96,000.

 

B. $60,000.

 

C. $84,000.

 

D. $80,000.

 

 

 

76.Taylor and King, CPAs installed a new computer system. When the needs of the various divisions were analyzed, it was determined that the Audit Division would require 40% of the capacity, the Tax Division would require 25% of the capacity, and the Business Consulting Division would require 35% of the capacity. The computer system will cost $240,000.How much of the computer system’s cost will be allocated to the Business Consulting Division?   

A. $96,000.

 

B. $60,000.

 

C. $84,000.

 

D. $80,000.

 

 

 

77.One department in a company had a contribution margin of $15,000 and a net loss from operations of $2,000. The indirect expenses allocated to this department would have been incurred whether or not the department existed. If this department had been eliminated, the company’s reported net income would have been   

A. $2,000 higher.

 

B. $15,000 lower.

 

C. $13,000 lower.

 

D. the same with or without the department.

 

 

 

 

78.Department XYZ had sales of $90,000, direct expenses of $60,000 and indirect expenses of $50,000. The indirect expenses allocated to this department would have been incurred whether or not the department existed. If this department had been eliminated, the company’s reported net income would have been   

A. $20,000 higher.

 

B. $30,000 higher.

 

C. $20,000 lower.

 

D. $30,000 lower.

 

 

 

 

79.XYZ Company has four sales territories and is considering eliminating the Great Lakes Region which had sales of $100,000, direct expenses of $70,000 and indirect expenses of $50,000. If the Great Lakes Region is eliminated, 80% of the indirect expenses would still remain. If this region were to be eliminated, the company’s overall net income would be:   

A. $20,000 higher.

 

B. $30,000 higher.

 

C. $20,000 lower.

 

D. $40,000 lower.

 

 

 

80.The telephone expense is allocated on the basis of floor space. Department A occupies 1,875 square feet and Department B occupies 625 square feet. If the telephone expense is $600, the amount allocated to Department A is   

A. $150.

 

B. $300.

 

C. $450.

 

D. $288.