The sales, gross profit, and direct and indirect operating expenses of Departments A and B of Cardoba Inc. are as follows: Dept. ADept. BTotalSales$420,000$290,000$710,000Gross profit243,000197,000440,000Direct operating expenses205,000118,000323,000Indirect operating expenses160,000Required:Compute the departmental direct operating margin and direct operating margin percentage for each department.
The sales, gross profit, and direct and indirect operating expenses of Departments A and B of Cardoba Inc. are as follows: Dept. ADept. BTotalSales$420,000$290,000$710,000Gross profit243,000197,000440,000Direct operating expenses205,000118,000323,000Indirect operating expenses160,000Required:Compute the departmental direct operating margin and direct operating margin percentage for each department.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter25: Departmental Accounting
Section: Chapter Questions
Problem 3CE
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Question
The sales, gross profit, and direct and indirect operating expenses of Departments A and B of Cardoba Inc. are as follows:
Dept. A
Dept. B
Total
Sales
$420,000
$290,000
$710,000
Gross profit
243,000
197,000
440,000
Direct operating expenses
205,000
118,000
323,000
Indirect operating expenses
160,000
Required:
Compute the departmental direct operating margin and direct operating margin percentage for each department.
Expert Solution
Step 1
Direct Operating margin of a department helps in the evaluation of the level of income available for all the operating expenses.
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