Question : 24.3 Learning Objective 24-3 1) When preparing an income statement showing : 1171235

24.3 Learning Objective 24-3

1) When preparing an income statement showing departmental contribution margin:

A) indirect expenses are combined with direct expenses.

B) indirect departmental expenses are added to contribution margin.

C) direct expenses are subtracted from gross profit of a department.

D) None of these answers is correct.

2) Compute the contribution margin for the video department, when gross profit is $970,000, direct expenses $280,000, and indirect expenses are $190,000.

A) $320,000

B) $690,000

C) $510,000

D) $700,000

3) The PPC department of Ajax shows gross sales of $730,600 for computer supplies and $934,900 for office supplies. The cost of the computer supplies was $534,000 and the cost of the office supplies was $491,400. Direct expenses were $75,200 for the company and indirect expenses were $75,200. What was the contribution margin for the company?

A) $640,100

B) $583,500

C) $489,700

D) $564,900

4) A line on the income statement that indicates what a department has left after covering cost of goods and sold and direct expenses is:

A) the gross margin.

B) the net income.

C) the contribution margin.

D) None of these answers is correct.

5) What is the purpose for determining contribution margin?

A) To show the contribution by department toward covering indirect costs

B) To help determine whether or not to eliminate a department

C) To show the effect on net income for each department

D) All of these answers are correct.

6) Supporters of the contribution margin approach believe that:

A) indirect expenses should be departmentalized.

B) indirect expenses should not be used for evaluating departmental performance.

C) indirect expenses are proportionally charged to each department.

D) direct expenses should not be used in evaluating departmental performance.

7) The cosmetic department experienced the following revenue and expenses during December:

Sales

$86,000

Cost of Goods Sold

30,000

Direct Operating Expenses

9,000

Indirect Operating Expenses

3,000

The cosmetic department’s contribution margin is:

A) $57,000.

B) $44,000.

C) $53,000.

D) $47,000.

8) On a departmental income statement, contribution margin minus total indirect expenses equals:

A) departmental contribution margin.

B) net income.

C) income before taxes.

D) income taxes.

9) On a departmental income statement, sales less cost of goods sold and direct expenses equals:

A) gross margin.

B) income before taxes.

C) indirect expenses.

D) departmental contribution margin.

10) The photography department in a department store experienced the following revenue and expenses during October:

Sales

$23,500

Cost of Goods Sold

8,200

Direct Operating Expenses

2,300

Indirect Operating Expenses

1,000

The photography department’s contribution margin is:

A) $15,300.

B) $20,200.

C) $13,000.

D) $14,300.

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July 1, 2023

9.1 The United States in the International Economy

1) Following the tariff imposed on Chinese tires, some businesspeople correctly argued that the U.S. tariff would result in

A) China retaliating by raising tariffs on some U.S. exports.

B) China halting the sale of all products in the United States.

C) U.S. firms never being able to meet the demand for U.S.-produced tires.

D) the government demanding price cuts from U.S. tire manufacturers.

2) Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

A) they do not want to offend their employers who want them.

B) politicians lobby to convince workers the restrictions will make them better off.

C) they believe the restrictions will protect their jobs.

D) they don't understand that the restrictions will threaten their jobs.

3) The intention of the U.S. tariff on Chinese tires was to

A) protect jobs in the U. S. tire industry.

B) protect infant industries in tire U.S. tire market.

C) insure that Chinese tires meet U.S. quality and safety standards.

D) save the government money by restricting the sale of more expensive Chinese-made tires.

4) In the 1930s, the United States charged an average tariff rate ________. Today, the rate is ________.

A) of 100 percent; 20 percent

B) above 50 percent; less than 1.5 percent

C) of less than 10 percent; over 40 percent

D) of 17 percent; 33 percent

5) A tariff is a tax imposed by a government on

A) exports.

B) services.

C) imports.

D) luxury items.

6) Goods and services bought domestically but produced in other countries are referred to as

A) exports.

B) imports.

C) transfer payments.

D) foreign consumption.

7) Exports are domestically produced goods and services

A) sold to other countries.

B) sold to the government.

C) sold at home.

D) which are used to produce other goods and services.

8) When Roxanne, a U.S. citizen, purchases a designer dress from Barneys of New York that was made in Milan, the purchase is

A) both a U.S. and an Italian import.

B) a U.S. import and an Italian export.

C) a U.S. export and an Italian import.

D) neither an export nor an import for either country.

9) When BMW, a German company, purchases a welding machine that was made in Toronto, the purchase is

A) both a German and a Canadian import.

B) a German import and a Canadian export.

C) a German export and a Canadian import.

D) neither an export nor an import for either country.

10) Which of the following statements about the importance of trade to the U.S. economy is true?

A) Since 1950, both exports and imports have steadily decreased as a fraction of U.S. gross domestic product.

B) Overall, about 80 percent of U.S. manufacturing jobs depend directly or indirectly on exports.

C) The United States is the second largest exporter in the world.

D) The U.S. economy is highly dependent on international trade for growth in its gross domestic product.