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Linda_us
Linda_us, Finance, Accounts & Homework Tutor
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Experience:  Post Graduate Diploma in Management (MBA)
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1. A department that incurs costs without directly generating

Resolved Question:

1. A department that incurs costs without directly generating revenues is a:

A. Service center.
B. Production center.
C. Profit center.
D. Cost center.
E. Performance center.


2. Costs that the manager has the power to determine or at least strongly influence are called:

A. Uncontrollable costs.
B. Controllable costs.
C. Joint costs.
D. Direct costs.
E. Indirect costs.


3. The most useful evaluation of a manager's cost performance is based on:

A. Controllable costs.
B. Contribution percentages.
C. Departmental contributions to overhead.
D. Fixed expenses.
E. Direct costs.


4. In a firm that manufactures clothing, the department that is responsible for actually assembling the garments could best be described as a:

A. Service department.
B. Operating or production department.
C. Cost center.
D. Department in which all of the costs incurred are direct expenses.
E. Department in which all of the costs incurred are indirect expenses.



















Problem
Texas Toys, a retail store, has four sales departments supported by three service departments. Cost and operational data for each department follow:

Sales Department Sales Cost of Goods Sold Square Footage Purchase orders
Issued:
1 $92,160 $36,864 1,728 1,260
2 69,120 32,832 3,024 1,680
3 80,640 32,256 1,296 2,310
4 46,080 27,648 2,592 1,750

Service Dept. Allocation Basis Cost
Advertising sales $10,000
Maintenance square footage 6,900
Purchasing no. of purchase orders issued 12,000






Determine the service department expenses to be allocated to Sales Department 1 for:
Advertising ___________________
Maintenance __________________
Purchasing ___________________
Submitted: 4 years ago.
Category: Homework
Expert:  Linda_us replied 4 years ago.

Hi Mwhite

 

Welcome to Justanswer

 

Click here for Solution

 

Regards

 

Linda

Customer: replied 4 years ago.

On question 5- how did you come up with the numbers for advertising,maintenance & purchasing?

 

can you please break this question down and help with the math?

 

Thanks.

Expert:  Linda_us replied 4 years ago.

Sure..I will post answer in few minutes

Expert:  Linda_us replied 4 years ago.
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Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 6995
Experience: Post Graduate Diploma in Management (MBA)
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