11) Sales minus cost of goods sold yields:

A) operating expenses.

B) gross profit.

C) income before taxes.

D) net income.

 

12) An example of a cost center is:

A) a Holiday Inn.

B) the restaurant in a motel.

C) the administrative department in a motel.

D) the catering department in a motel.

13) Gross profit by department appears on the:

A) balance sheet.

B) statement of retained earnings.

C) statement of cash flows.

D) income statement.

 

14) The women’s shoe department shows gross sales of $245,000 with the cost of the shoes $147,000. The men’s shoe department shows gross sales of $184,000 with the cost of the shoes $110,000. What is the gross profit for each department respectively?

A) $392,000 and $294,000

B) $245,000 and $184,000

C) $98,000 and $74,000

D) $429,000 and $257,000

 

15) When a company tracks gross profit by department, the sales journal will:

A) not differ from a company that does not track gross profit by department.

B) have a separate column for accounts receivable for each department.

C) have a separate column for sales for each department.

D) have a column for purchases for each department.

 

16) A company has four departments (A, B, C and D) and the net sales are $35,000; $40,000; $60,000 and $25,000 respectively. The cost of goods sold per department are $25,000; $15,000; $40,000 and $15,000 respectively. What department has the lowest gross profit?

A) A

B) B

C) C

D) both A and D

17) A company has four departments (A, B, C and D) and the net sales are $35,000; $40,000; $60,000 and $25,000 respectively. The cost of goods sold per department are $25,000; $15,000; $40,000 and $15,000 respectively. What department has the highest gross profit?

A) A

B) B

C) C

D) D

 

18) Calculate a department’s gross profit on sales given the following:

 

Sales

$1,600

Operating expenses

350

Cost of goods sold

900

 

A) $350.

B) $700.

C) $1,050.

D) $1,250.

 

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

 

Sales

$11,000

Cost of Goods Sold

5,000

Direct Operating Expenses

800

Indirect Operating Expenses

2,100

 

The photography departmental gross profit on sales is:

A) $3,100.

B) $5,200.

C) $6,000.

D) $8,100.

20) The espresso department experienced the following revenue and expenses during October:

 

Sales

$17,000

Cost of Goods Sold

9,000

Direct Operating Expenses

4,000

Indirect Operating Expenses

2,000

 

The espresso departmental gross profit on sales is:

A) $2,000.

B) $4,000.

C) $8,000.

D) $11,000.

 

 

 



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