25) Carla’s building expenses, which are indirect, are based on each department’s square footage. Department A occupies 35,000 square feet. Department B occupies 55,000 square feet, and Department C occupies 10,000 square feet. If the building expenses total \$250,000, how much is allocated to Department B?

A) \$83,333

B) \$137,500

C) \$87,500

D) \$25,000

26) The candy department experienced the following revenue and expenses during October:

 Sales \$13,500 Cost of Goods Sold 8,200 Direct Operating Expenses 1,100 Indirect Operating Expenses 700

The candy departmental net income is:

A) \$6,400.

B) \$3,500.

C) \$4,200.

D) \$5,300.

27) If gross sales for the tools department are \$500,000 and gross sales for the appliances department are \$300,000, what is the fraction used to apportion the indirect advertising for the appliances department if it is based on gross sales?

A) 1/2

B) 1/3

C) 3/8

D) 2/3

28) Julia Company allocates its indirect advertising expenses based on each department’s gross sales. If the men’s apparel department has gross sales of \$225,000 out of a total of \$2,025,000 in gross sales, what fraction would Julia use to allocate its indirect advertising expenses?

A) 1/9

B) 1/10

C) 1/11

D) 1/8

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

 Sales \$6,500 Cost of Goods Sold 2,800 Direct Operating Expenses 200 Indirect Operating Expenses 1,300

The photography departmental net income is:

A) \$6,500.

B) \$3,700.

C) \$3,500.

D) \$2,200.

30) Calculate the costume jewelry department net income given the following:

 Sales \$1,300 Direct operating expenses 300 Indirect operating expenses 250 Cost of goods sold 1,000

A) \$1,300

B) \$1,000

C) \$300

D) (\$250)

31) Departmental accounting requires:

A) measuring departmental gross profit.

B) allocating direct costs to departments.

C) allocating indirect costs to departments.

D) None of these answers is correct.

32) Which of the following expenses is the most difficult to allocate to departments?

A) Cost of goods sold

B) Use of general supplies by everyone

C) Salaries and wages

D) Merchandise purchases

33) Which allocation base is best used to allocate building depreciation?

A) Square feet of space used

B) Number of employees

C) Hours used

D) Building depreciation can be separately traced to each department

34) Which allocation base is best used to allocate advertising expense by selling department?

A) Square feet of spaced used

B) Gross sales of each department as a percent of total gross sales

C) An even split among all selling departments

D) Some other method not listed.