National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. $ 45,000 25,000 Rent Advertising 10,000 $ 80,000 Insurance Total The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of indirect expenses by 4,000 square feet to find an average cost of $20 per square foot, and then allocated indirect expenses to each department based on the square feet it occupied. The company now wants to allocate indirect expenses using the allocation bases shown below. Value of Insured Square Feet 1,560 2,440 Assets $ 56,000 44,000 Sales Department Housewares $ 340,000 160,000 Sporting 000 S 500 000 S 100 000 Mete1
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- A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950A retailer allocates $196,000 of total annual rent expense to its four departments in a two-story building: $118,000 is allocated to first floor departments and $78,000 to second floor departments. Each floor's rent is then allocated to departments based on square feet occupied. Department Square Feet Occupied 2,280 1,520 2,660 1,140 A 8 C D Allocate rent expense to each department. Square Feet First Floor Department A Department B Totals Second Floor Department C Department D Totals Square Feet Floor First First Second Second Percent of Total Percent of Total % % % Cost Allocated Cost AllocatedClara Co. owns a branch in New York City. During the year, the home office shipped to the branch supplies costing 12,000USD at a billed price of 20% above cost. The inventories of supplies at the branch were as follows: Beginning Inventory 9,000USD Ending inventory 10,800USD On December 31, the home office reportedly holds inventories of 16, 050USD which included 1,050USD held on consignment. Both use the periodic inventory method. What is the amount of inventories in their combined Statement of Financial Position on December 31.
- retailer has three departments—Housewares, Appliances, and Clothing—and buys advertising that benefits all departments. Advertising expense is $150,000 for the year, and departmental sales for the year follow: Housewares, $356,250; Appliances, $641,250; and Clothing, $427,500. How much advertising expense is allocated to Appliances if allocation is based on departmental sales? a. $37,500 c. $45,000 e. $641,250 b. $67,500 d. $150,000Zabeer Company is a large retailer of custom-built air conditioning units for commercial buildings. The company assembled the information shown below for the quarter ended March 31:Total sales revenue Tk.6,00,000Selling price per unit Tk.450 Variable selling expense per unit Tk.45Variable administrative selling expense per unit Tk.30Total fixed selling expense Tk.170,000Total fixed administrative expense Tk.130,000Merchandise inventory, opening balance Tk.60,000Merchandise inventory, ending balance Tk.1,10,000Merchandise purchase Tk.2,40,000Required: i. Prepare a traditional format income statement for the quarter ended March 31. ii. Prepare a contribution format income statement for the quarter ended March 31.Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly contribution format income statement follows: Department Total Hardware Linens Sales $ 4,250,000 $ 3,200,000 $ 1,050,000 Variable expenses 1,368,000 952,000 416,000 Contribution margin 2,882,000 2,248,000 634,000 Fixed expenses 2,260,000 1,400,000 860,000 Net operating income (loss) $ 622,000 $ 848,000 $ (226,000 ) A study indicates that $379,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 13% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department?
- Championship Sports Inc. operates two divisions—the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales—Winter Sports Division $8,900,000 Sales—Summer Sports Division 16,400,000 Cost of Goods Sold—Winter Sports Division 5,000,000 Cost of Goods Sold—Summer Sports Division 9,000,000 Sales Expense—Winter Sports Division 650,000 Sales Expense—Summer Sports Division 1,200,000 Administrative Expense—Winter Sports Division 800,000 Administrative Expense—Summer Sports Division 1,450,000 Advertising Expense 1,090,000 Transportation Expense 192,000 Accounts Receivable Collection Expense 68,000 Warehouse Expense 1,800,000 The bases to be used in allocating expenses, together with other information, are as follows: Advertising expense—incurred at…Championship Sports Inc. operates two divisions—the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales—Winter Sports Division $9,200,000 Sales—Summer Sports Division 16,500,000 Cost of Goods Sold—Winter Sports Division 4,400,000 Cost of Goods Sold—Summer Sports Division 9,000,000 Sales Expense—Winter Sports Division 740,000 Sales Expense—Summer Sports Division 1,300,000 Administrative Expense—Winter Sports Division 740,000 Administrative Expense—Summer Sports Division 1,760,000 Advertising Expense 1,115,000 Transportation Expense 285,000 Accounts Receivable Collection Expense 70,000 Warehouse Expense 987,000 The bases to be used in allocating expenses, together with other information, are as follows: Advertising expense—incurred at…A retail store has three departments, S, T, and U, and pays for general advertising that benefits all departments. Advertising expense totaled $41,000 for the year, and departmental sales were as follows. Allocate advertising expense to Department T based on departmental sales. (Do not round your intermediate calculations.) Department Sales $ $ 137,000 T215,050 U 160, 450 Total $ 512,500
- XYZ owns a branch in New York. During the year, the home office shipped to the branch supplies costing P120,000 at a billed price of 20% above cost. The inventories of supplies at the branch were as follows: Beg Inventory, P90,000 Ending inventory P108,000. On December 31, the home office holds inventories of P160,500 which included P10,500 held on consignment. Both locations use the periodic inventory method. Compute for the inventories in a combined Statement of Financial Position as of December 31.Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Total Hardware Linens Sales $ 4,050,000 $ 3,020,000 $ 1,030,000 Variable expenses 1,394,000 988,000 406,000 Contribution margin 2,656,000 2,032,000 624,000 Fixed expenses 2,160,000 1,300,000 860,000 Net operating income (loss) 496,000 $ 732,000 $ (236, 000) A study indicates that $371,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 17% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department?Bank's Department Store has three departments: Men's, Women's, and Children's. The store incurred $22,000 of store rental costs during the current year. The departments identified the following cost drivers: Labor dollars Number of employees Square footage Number of sales transactions Multiple Choice $14,270 Men's $ 522,000 $1,425 28 2,200 292,000 Women's $ 767,000 38 7,200 892,000 Using the most appropriate cost driver, how much rental cost should be allocated to the Women's Department? Note: Do not round intermediate calculations. Round final answer to the nearest dollar. Children's $ 232,000 22 1,700 82,000