41) A department with sales of $120,000; cost of goods sold of $75,000; and operating expenses of $20,000 has a gross profit of $45,000.

 

42) A cost center is evaluated on the volume of revenues generated.

 

43) The accountant must always consider operating expenses, such as rent and advertising, when determining gross profit for a department.

 

44) When a company tracks gross profit by department, the sales journal has separate columns for Sales for each department.

 

45) When a company tracks gross profit by department, the sales journal has separate columns for Accounts Receivable for each department.

46) Explain the difference between a “cost center” and a “profit center.”

 

Below is a list of departments; you are to identify each as either [1] a profit center or [2] a cost center.

 

47) The dairy department for a food store.________

 

48) The pro shop for a resort.________

 

49) The personnel office for a department store.________

 

50) The maintenance office of a mall.________

 

 

 



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