16 Gion Company is considering eliminating its windows division, which reported an operating loss for the recent year of $120.000. Division sales for the year were $1260,000 and its variable costs were $125,000. The fixed costs of the division were $305.000. If the windows division is dropped, 50% of the fixed costs allocated to it could be eliminated. The impact on Gion's operating income from eliminating this business segment would be Multiple Choice $38.050 decrease $17,500 increase $152,500 decrease $152,500 increase 14 Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: office Expenses Salaries Depreciation Advertising 38.40 Total $48,000 24,000 47,000 Allocation Basis Number of employees Cost of goods sold Net sales Item Number of employees Net sales Cost of goods sold Drilling Grinding Total 1,200 1,800 3,000 $346,000 $519,000 $865,000 $102,600 $167,400 $270,000 The amount of depreciation that should be allocated to Grinding for the current period is: Multiple Choice $24.000 13 The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments, Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Purchasing department expense to be allocated to Fabrication Operating costs No. of purchase orders Sq. ft. of space Purchasing Maintenance Fabrication $42,000 $24,000 $106,000 15 3,800 Assembly $72,000 5 2,200 Multiple Choice $10.500 $31.500. $15.200 12 Ready Company has two operating production) departments: Assembly and Painting. Assembly has 180 employees and occuples 54,000 square feet; Painting has 120 employees and occuples 36,000 square feet. Indirect factory expenses for the current period are as follows: 2 01:18:19 Administration Maintenance $ 85,000 $108,000 Administration is allocated based on workers in each department, maintenance is allocated based on square footage. The amount of administration expenses that should be allocated to the Painting Department for the current period is: Multiple Choice $51000 $64,800 $115,800