91. In evaluating the profit center manager, the income from operations should be compared: A. across profit centersB. to historical performance or budgetC. to the competition’s net incomeD. to the total company earnings per share
92. 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 $1,025,000B. total service department charges are $1,025,000C. noncontrollable charges are $1,025,000D. direct manufacturing charges are $1,025,000
93. The costs of services charged to a profit center on the basis of its use of those services are called: A. operating expensesB. noncontrollable chargesC. service department chargesD. activity charges
94. Division T reported income from operations of $875,000 and total service department charges of $575,000. Therefore: A. net income was $300,000B. the gross profit margin was $300,000C. income from operations before service department charges was $1,450,000D. consolidated net income was $300,000
95. To calculate income from operations, total service department charges are: A. added to income from operations before service department chargesB. subtracted from operating expensesC. subtracted from income from operations before service department chargesD. subtracted from gross profit margin
96. Income from operations for Division B is $150,000, total service department charges are $400,000 and operating expenses are $2,266,000. What are the revenues for Division B? A. $550,000B. $3,216,000C. $2,816,000D. $2,666,000
97. Income from operations for Division M is $120,000, and income from operations before service department charges is $975,000. Therefore: A. total operating expenses are $855,000B. total manufacturing expenses are $855,000C. direct materials, direct labor, and factory overhead total $855,000D. total service department charges are $855,000
98. The following data are taken from the management accounting reports of Dancer Co.:
Div. A
Div. B
Div. C
Income from operations
$1,800,000
$1,350,000
$1,350,000
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 bonusB. Division B’s manager is given the bonusC. Division C’s manager is given the bonusD. The managers of Divisions B and C divide the bonus
99. What is the term used to describe expenses that are incurred for the benefit of a specific department? A. Indirect expensesB. Margin expensesC. Departmental expensesD. Direct expenses
100. The following financial information was summarized from the accounting records of Block Corporation for the current year ended December 31:
SoftwareDivision
HardwareDivision
CorporateTotal
Cost of goods sold
$47,200
$30,720
Direct operating expenses
27,200
20,040
Net sales
95,000
64,000
Interest expense
$ 2,040
General overhead
18,160
Income tax
4,700
The gross profit for the Software Division is: A. $47,800B. $20,600C. $13,240D. $33,280
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