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.