The following data were summarized from the accounting records for Ruiz Industries Inc. for the year ended November 30, 20Y8: Cost of goods sold: Support department allocations: Commercial Division $439,030 Commercial Division $59,870 Residential Division 212,330 Residential Division 36,780 Administrative expenses: Sales: Commercial Division $79,820 Commercial Division $665,190 Residential Division 75,830 Residential Division 379,160 Prepare divisional income statements for Ruiz Industries Inc. Ruiz Industries Inc. Divisional Income Statements For the Year Ended November 30, 20Y8 Commercial Division Residential Division Sales $4 Cost of goods sold Gross profit v $4 Administrative expenses Operating income before support department allocations Support department allocations Operating income

The following data were summarized from the accounting records for Ruiz Industries Inc. for the year ended November 30, 20Y8: Cost of goods sold: Support department allocations: Commercial Division $439,030 Commercial Division $59,870 Residential Division 212,330 Residential Division 36,780 Administrative expenses: Sales: Commercial Division $79,820 Commercial Division $665,190 Residential Division 75,830 Residential Division 379,160 Prepare divisional income statements for Ruiz Industries Inc. Ruiz Industries Inc. Divisional Income Statements For the Year Ended November 30, 20Y8 Commercial Division Residential Division Sales $4 Cost of goods sold Gross profit v $4 Administrative expenses Operating income before support department allocations Support department allocations Operating income

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 7SPA: INCOME STATEMENT WITH DEPART MENTAL GROSS PROFIT AND OPERATING INCOME Thomas and Hill Distributors...

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INCOME STATEMENT WITH DEPART MENTAL GROSS PROFIT AND OPERATING INCOME Thomas and Hill Distributors has divided its business into two departments: commercial sales and industrial sales. The following information is provided for the year ended December 31, 20--: REQUIRED 1. Prepare an income statement showing departmental gross profit and total operating income. 2. Calculate departmental gross profit percentages.
COMPUTING OPERATING INCOME The sales, cost of goods sold, and total operating expenses of departments A and B of Ash Company are as follows: Compute the departmental operating income for each department.
The following data were summarized from the accounting records for Ruiz Industries Inc. for the year ended November 30, 20Y8: Prepare divisional income statements for Ruiz Industries Inc.
Divisional income statements The following data were summarized from the accounting records for Vintage Construction Company for the year ended October 31, 20Y3. Prepare divisional income statements for Vintage Construction Company.
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Profit center responsibility reporting for a service company Red Line Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance, using operating income as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: The company operates three support departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Customer Support Department is the companys point of contact for new service, complaints, and requests for repair. The department believes that the number of customer contacts is a cost driver for this work. The Legal Department provides legal services for division management. The department believes that the number of hours billed is a cost driver for this work. The following additional information has been gathered: Instructions 1. Prepare quarterly income statements showing operating income for the three divisions. Use three column headings: East, West, and Central. 2. Identify the most successful division according to the profit margin. Round to the nearest whole percent. 3. Provide a recommendation to the CEO for a better method for evaluating the performance of the divisions. In your recommendation, identify the major weakness of the present method.
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Corrections to service department charges Panda Airlines Inc. has two divisions organized as profit centers, the Passenger Division and the Cargo Division. The following divisional income statements were prepared The service department charge rate for the service department costs was based on revenues. The following additional information is available a.Does the operating income for the two divisions accurately measure performance? b.Using service charge rates for service department charges, correct the divisional income statements.
Divisional performance analysis and evaluation The vice president of operations of Free Ride Bike Company is evaluating the performance of two divisions organized as investment centers. Invested assets and condensed income statement data for the past year for each division are as follows: Instructions 1. Prepare condensed divisional income statements for the year ended December 31, 20Y7, assuming that there were no support department allocations. 2. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment for each division. Round percentages and the investment turnover to one decimal place. 3. If managements minimum acceptable return on investment is 10%, determine the residual income for each division. 4. Discuss the evaluation of the two divisions, using the performance measures determined in parts (1), (2), and (3).
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Profit center responsibility reporting On-Demand Sports Co. operates two divisions—the Action Sports Division and the Team Sports Division. The following income and expense accounts were provided as of November 30. 20Y1, the end of the current fiscal year, after all adjustments, including those for inventories, were recorded The bases to be used in allocating expenses, together with other essential information, are as follows a.Advertising expense—incurred al headquarters, charged back to divisions on the basis of usage: Action Sports Division. $1,200,000; Team Sports Division, $1,800,000. b. Transportation expense—charged hack lo divisions at a charge rale of $18.50 per bill of lading: Action Sports Division, 14.000 bills of lading; Team Sports Division. 21.400 bills of lading. C. Accounts receivable collection expense—incurred al headquarters, charged back to divisions at a charge rate of $9-00 per invoice: Action Sports Division. 32.000 sales invoices; Team Sports Division, 12.500 sales invoices. d. Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Action Sports Division. 120.000 square feet; Team Sports Division. 80.000 square feet. Prepare divisional income statements with two column headings: Action Sports Division and Team Sports Division. Provide supporting schedules for determining service department charges.